TOKYO - Japan was not a fun place to own a car even before wide-ranging recalls
from Toyota and Honda sullied the country's reputation for producing quality
automobiles.
Roads are crowded, narrow and dull; highway speed limits top out at 80
kilometers per hour, and the toll fees are steep - drivers on the 325-kilometer
trip from Tokyo to Nagoya before the financial crisis broke last year had to
pay 7,100 yen (US$77.47). Within Tokyo, a parking space costs the equivalent of
US$300 a month and up.
Regulations and taxes add to the pain of car ownership, helping to feed an
"auto apathy" that for years has dragged down sales of new and used cars, to
the extent they are now at levels seen in
the 1980s, according to the Japan Automobile Dealers' Association. With the
latest economic crisis also having an impact, domestic industry-wide sales will
drop 8.5% to 4.3 million vehicles in the year ending March 31, the Japan
Automobile Manufacturers Association said last year.
That is showing up in the income of Toyota, the world's biggest automaker. Last
May, the company reported an annual net loss of US$4.4 billion, its first loss
in 70 years. A year ago, it closed all of its plants across Japan for 11 days
to reduce output and stocks of unsold vehicles. In the year to last March,
Honda was the only one of Japan's three top automakers - Nissan is the third -
to post a profit.
An executive at a major Japanese automaker, who doesn't want his name used
because of his company's dealings with Toyota, said young Japanese in
particular were turning away from automobiles. "In the past, having a catchy
car was considered to be a young man's dream. It is not the case any more,"
said the executive. "This phenomena is called kuruma-banare [leaving
from the car] in the Japanese automobile industry."
The hassle of owning a car in Japan begins at the dealership, which present
similar-looking vehicles for identical prices. Nor is it easy to trade in an
old car, or to sell one.
Kumiko Fukushi recently tried to sell her smooth-running Toyota Vista, with
60,000 kilometers on the clock. In North America, it might fetch US$3,000 or
more. In Tokyo, several dealers offered Fukushi "minus 30,000 yen" (about
US$330), meaning she would have to pay the dealer to take her car to cover
recycling fees charged to junk a car.
Auto owners also face a vehicle inspection every year or two, which can cost
upward of $1,000 a year, even for a perfect car. Japan resident blogger "Dave
Webb" calls these inspections "the motoring scourge in Japan", "the most common
complaint people will have", and "a proverbial spanner in the works" of the
industry as a whole.
Next comes repairs. One Toyota dealer told Fukushi it would cost about $2,000
to overhaul a faulty air-conditioning system. A nearby Autobacs parts shop
eventually fixed it with a $50 shot of freon.
Toyota, at the forefront of the recent spate of recalls involving a variety of
problems, lists on its website 12 models as being involved, with production
dates going back to 2004. Estimates of the number of vehicles involved range
upwards from 8.5 million. Honda this month added 437,000 vehicles to its
15-month-old global recall for faulty airbags. Last month, it recalled more
than 600,000 cars on concern that window switches could overheat.
While service standards generally remain high in Japan, many consumers and
critics note a perceived decline in product quality and are concerned about the
implications. "I am most concerned about a possible loss of trust in Japanese
products," Tomohiro Koseki, who writes books about Japanese factories, told the
Asahi newspaper. Toyota "should be well aware of its responsible position
vis-a-vis Japanese industry as a whole. A loss of confidence in Toyota would
have an ill-effect on its many sub-contractors and affiliates."
The Japanese auto executive said the Toyota recall would have a negative effect
on the economy "through its supply linkage. It would have also a negative
effect psychologically for the decline in Japanese pride in 'industrial
excellence'." It's a hard lesson for other companies in Japan, he says.
"Nothing is infallible, including the 'Toyota Way'."
The company introduced the 14 principles of the "Toyota Way" in 2001, "to
provide the tools for people to continually improve their work". With or
without the help of this guiding philosophy (Principle 1: Base your management
decisions on a long-term philosophy, even at the expense of short-term
financial goals), the company jumped from a distant third in world sales in
2000, with fewer than 6 million behind GM's 8.1 million and Ford's 7.3 million,
to be the world's number one automaker eight years later, with sales of 9.2
million as GM output remained little changed in the period. Somewhere in that
surge, important details in production were overlooked. Toyota is also under
attack for its management of the recall.
It was not until February 5, that Toyota chief executive Akio Toyoda, grandson
of the company's founder, appeared in public in response to the global recall
announced on January 21. Toyoda, who took over at the company last June, spoke
from his company's home base in Aichi prefecture and sent his message via
satellite to reporters gathered at a Toyota office in Tokyo. "I offer my
apologies for the worries. Many customers are wondering whether their cars are
OK," he said. When a reporter asked him to speak English, he said, "Please
believe me. We always put customers first."
William Bonds, a British expatriate who has been covering the Japanese auto
industry over two decades for Japanese media, is not impressed, or surprised.
"Toyota has long had a revered place in corporate Japan, and Japan has long
been revered for its corporate management practices. But the truth is that the
Japanese fail miserably in actual management. They are fantastic at producing
systems - and the Japanese defined the process in auto-manufacturing - but when
the system breaks down, they are clueless."
For consumers, there seems nowhere to go with a complaint. The top brass of
Toyota inhabit a fiefdom in Toyota City in rural Aichi, about 300 km from
Tokyo. It's as if Ford and GM were based in Montana or Manitoba, not in the
vicinity of Detroit and Toronto. Bonds says Toyota is "arrogant", a "classic
Japanese corporation". Many Japanese joke that you are more likely to run into
a Toyota executive on a golf course in Thailand than anywhere inside Japan.
Masaaki Sato, author of books on Toyota and Honda, took the rare step of
speaking out on TV against Toyoda's slow response to the issue. "He should have
come out a week ago," Sato said. "After all the foot-dragging, he was pushed
into a corner." Sato also questioned Toyoda for having to be pushed by US
Transportation Secretary Ray LaHood, instead of approaching consumers first.
The question now is whether customers will believe Toyoda - who is to appear
before the US House of Representatives Oversight and Government Reform
Committee on Wednesday - in his claim to put customers first.
For years, the Japanese media have ignored protest groups, including former
journalists, who rallied outside branch offices of automakers demanding
compensation for respiratory illnesses blamed on auto emissions. Little
attention was drawn to a court-mediated settlement in August 2007 requiring the
government and Toyota, Honda and Nissan to pay 3.3 billion yen to 520 Tokyo
residents who blamed diesel gas fumes for causing their asthma and the deaths
of 110 people.
With 550 subsidiaries and 320,000 employees worldwide, Toyota has been able to
trump the truth with powerful advertising - last October, the company announced
a $1 billion advertising venture - and media connections. NIFCO, a major parts
supplier for Toyota, for example, owns the Japan Times, the country's oldest
English-language daily.
Critics also note that government pressure on Toyota came from abroad, not
Japan, where politicians skew policies in favor of producers, not consumers.
Industry Minister Masayuki Naoshima of the Democratic Party of Japan is the
former head of Toyota's labor union. On Friday, responding to criticism that
Toyota was handling the issue slowly and took its time to decide on whether its
president would go to the US to present the company's case, Naoshima said the
recall was connected with very technical matters, and that Toyota thought it
should have officials with expertise speak before congress to prevent any
additional trouble, according to a Kyodo News report carried by Japan Times.
Prime Minister Yukio Hatoyama, rather than launch an investigation, responded
with muted criticism. "When an event that impairs safety occurs the initiative
should be taken to work for the safety of people in Japan and worldwide," he
said.
Christopher Johnson is a freelance writer based in Tokyo
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