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Resumption
of Automobile Imports After
World War II automobile import firstly resumed in 1948 under the foreign
currency allocation system. However, at that time, only automobiles for
special uses such as ambulances, and vehicles for media and tourists
were allowed to be imported, so most of foreign cars were those disposed
by the American military. Furthermore,
to accelerate the economic recovery, governmental policy was stipulated
that only vehicles manufactured in Japan could be procured for official
use. The emphasis was on promoting export while restricting import. As a
result, imported car owner was effectively limited to a small number of
wealthy and privileged people. Imported
Car Market Shaken by Boom and Bust With
elimination of the foreign currency allocation system in October 1965,
finished car import was liberalized and the imported car market began to
develop in earnest. Imported
car sales since 1966 went from a 10,000-unit level (which had been
maintained since 1964) to a 20,000-unit level in 1972 and then to a
30,000-unit level in the following year. Despite the impact of the first
oil crisis, sales reached to a 40,000-unit level in 1975 and imported
car sales peaked temporarily with 60,000 units in 1979. Factors
contributing to the development of the imported car market at that time
included elimination of customs in 1978 and appreciation of the yen
against foreign currencies. However, with the onset of the second oil
crisis in 1980, the economy suffered from a downturn, global concern
grew for energy conservation, and the dollar appreciated sharply. These
factors, combined with the product quality problems of American
automobiles, pushed the market back down to the 40,000-unit level.
American cars in particular suffered from severe setbacks - the demand
fell to one-tenth that of the peak level. As a result, many importers
withdrew from the Japanese market. From
1980, the downturn in imported car sales showed a sign of becoming
chronic. For four consecutive years until 1984, sales were lower than
the preceding year. The market hit the bottom in 1983 shrinking to
35,286 vehicles. Imported
Car Market Enjoys Dramatic Expansion After
the severe setback, the imported car market finally began to recover in
1984 when it returned to the 40,000-unit level. Furthermore, from this
time Japanese trade imbalances with the United States and Europe became
a source of international discord, and "Action Program to Promote
Import" announced by the government in 1985 was a catalyst for
turning imported automobile sales around and marked an advent of a new
era for the imported automobile. Following
an announcement of an action program, imported car sales leaped forward
with 50,172 vehicles in 1985, 68,357 vehicles in 1986, 97,750 vehicles
in 1987, 133,583 vehicles in 1988, 180,424 vehicles in 1989, and 221,706
vehicles in 1990. Many
factors contributed to a growth of the imported automobile market
including governmental efforts based on the action plan to eliminate
"Non-tariff barriers" by reforming the standards,
certification, and automobile-related tax systems. Other factors that
can be cited include aggressive efforts on the part of foreign
automobile manufacturers to enter the Japanese market, lower prices and
interest rates on automobile loans, the expansion of sales networks, and
the participation of domestic automobile manufacturers in the imported
car market (i.e., through import of overseas manufacturers' products as
well as their own foreign-built models). Market
Environment Changing, First Drop in Sales in Eight Years Resumption of
Automobile Imports 1990
was a watershed year for the imported car market, which grew so rapidly
as a result of the factors mentioned above. The changes underway in the
market included depreciation of the yen, rising official bank rate, and
the Persian Gulf Crisis. As a
result, some imported automobile prices and automobile loan interest
rates rose. Furthermore, the Japanese economy as a whole seemed
increasingly to head for a slowdown as stock prices crashed and real
estate prices continued to slide. Japan closed out its second long-term
economic boom since the end of World War皜.
This was a collapse of so-called bubble economy. In addition to it,
other factors also contributed to the slowdown in automobile sales such
as revising and strengthening the Garage Act in 1991, shortage of
parking places, and soaring fees. These
environmental factors had a profound influence on imported car sales
with the result that 1991 marked an end to a period of sustained growth,
which began in 1984. In 1992, sales fell again, and a negative growth
was thus recorded for two years consecutively. The
Imported Car Market: Facing New Challenges Under
these circumstances, the problem of the international trade imbalance
with the emphasis on trade in automobiles arose again, and the need to
increase import to Japan was further emphasized. In 1992 and 1993, the
government embarked on a new policy to support car import addressing the
discriminatory factors against import and improving the industry's
backing. In
1993, appreciation in the yen's value resulted in lowering imported car
prices, and this, together with the promotion of import, induced
Japanese car makers to boost foreign production for import to Japan.
There have also been a host of low interest auto loans and other
promotional campaigns as well as an increase in the sales network
starting with domestic dealers who handle imported cars. All of these
contributed to a recovery of year-on-year growth for the first time in
three years. Imported
car sales accelerated further in 1994. The total sales of the year were
significantly higher than the previous record in 1990 breaking through
300,000 units barrier for the first time. In 1995, imported car sales
rose to approximately 390,000 vehicles, which figure showed an
unprecedented market share of over 10% for the first time. The up-trend
continued till 1996 when sales surpassed over 400,000 units and hit a
new record for three consecutive years. From
1997, however, due to an increase in the consumption tax rate, the
suspension of special income tax cuts, and (overall) financial
uneasiness, consumer spending was low. The import of cars produced
overseas by Japanese makers was suspended, and higher prices for some
imported vehicles stemmed from the weak yen standing on a foreign
exchange market. For two consecutive years sales wedged in the previous
year's achievements. Nonetheless,
in 1999 sales increased a little more than the previous year and the
sluggish imported automobile sales hit the bottom. |