Cars no longer coveted by young

New generation of consumers views autos as exhorbitant waste, not status symbol

by Yuri Kageyama

The Associated Press

To get around the city, Yutaka Makino hops on his skateboard or takes the trains. Does he dream of the day when he owns his own car? Not a chance.

Like many Japanese of his generation, the 28-year-old musician and part-time maintenance worker says owning a car is more trouble than it’s worth, especially in a congested city where monthly parking runs as much as ¥30,000 ($330), and gas costs about ¥100 a liter (about $3.50 a gallon).

That kind of thinking — which has been dubbed by automakers as “kuruma banare,” or “demotorization” — represents a U-turn from the thinking of earlier generations of Japanese who viewed cars as status symbols. The trend is worrying auto executives who fear the nation’s love affair with automobiles is coming to an end.

“Young people’s interest is shifting from cars to communication tools like personal computers, mobile phones and services,” said Yoichiro Ichimaru, who oversees domestic sales at Toyota.

The Japan Automobile Manufacturers Association predicts auto sales in Japan will fall to 4.86 million in 2009 — the first drop below 5 million in more than three decades. Sales for 2008 are expected to reach 5.11 million, the worst since 1980.

Vehicle sales peaked at 7.78 million vehicles in 1990 during the go-go “bubble” economy. After that imploded, however, Japan was mired in a decade-long slowdown that squelched consumer spending and sent car sales downhill. Surging gas prices, which have begun to subside only recently, also eroded sales.

“The changes in individuals’ values on cars came cumulatively over time,” said Nissan Chief Operating Officer Toshiyuki Shiga. “The change in young people’s attitude toward cars didn’t happen overnight. So we have to keep convincing them cars are great.”

To do that, Nissan Motor Co. has stocked dealerships with colorful accessories to appeal to Japanese women’s alleged penchant for “cute” things and signed major league star Ichiro to do splashy TV ads for one of its new models, among other efforts.

Toyota, the nation’s biggest car maker, has hosted test-drive events, taken part in fashion shows and even developed its own suburban shopping mall with a dealership to reach out to buyers.

About half the autos produced in Japan are sold in Japan, while the other half are exported. But the U.S. market — where more profitable models like light trucks tend to be popular — is more lucrative.

Still, the disenchantment with cars is cause for concern. Americans, after all, are expected to start buying cars again — eventually — partly because of the inadequacy of mass transit there.

It’s a different story in Japanese cities, where streets are clogged but trains are efficient. The domestic market also is shrinking due to a drop in population.

Makino, the young man who plays what he calls “organic folk music,” is typical of the new breed that scoffs at the sportscar-idolizing culture of the older generation.

He and his friends see cars as nothing more than a tool, much like a vacuum cleaner, not a reflection of their identity, tastes or income level. Makino’s father own a car, but he has never owned one. And he doesn’t know a Honda Fit from a Toyota Vitz.

“I don’t believe that having more things enriches you,” Makino said in a recent interview at his apartment, sitting among shelves of wooden crates. “If you stay happy in your soul then you can be happy without money.”

Companies like Toyota and Honda Motor Co., along with electronics giants like Sony Corp. and Panasonic Corp., are the mainstays of the world’s second-largest economy, and a hollowing out of manufacturing would be lethal.

Manufacturing accounts for a fifth of Japan’s gross domestic product but 90 percent of its exports, and any serious faltering in that sector would have ripple effects throughout the country and likely further depress auto sales.

Unlike other industrialized nations, there is a lack of other powerful sectors to drive the economy, such as financials and services. Consumer spending makes up about 60 percent of GDP.

The damage caused by a declining auto industry would be devastating because so many jobs would be affected — not only at plants but as parts makers, distributors and other companies, including those that make electronics, batteries and other products for the industry.

Already, automakers here have shed thousands of jobs at plants that have been producing cars for overseas markets with a bigger thirst for autos. Toyota is projecting its first operating loss in 70 years.

Some dealers are taking extraordinary steps to attract domestic customers.

Motoharu Ishii has turned his Honda dealership into a special shop for dog owners. Bigger dogs can’t travel in Japanese trains, and so pet owners may be among the last holdouts in car ownership.

He helps them fit their vehicles with cages, offers discount coupons at dog runs, and has a fuzzy mat ready for visiting pets — in the same way some dealers prepare play areas for children.

“We want our customers to stay even a bit longer in our showroom,” he said, adding that although sales haven’t shot up he has managed to prevent drastic drops. “The last thing you want is a deserted showroom. If it looks busy, it makes it easier for people to drop by.”