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Sachiko Hirao

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JAPAN

Jan 1, 2000

Public must face higher tax burden: Imai

Japan must act on its deteriorating financial health by launching discussions on fiscal reform and revealing the results to the public, said Takashi Imai, chairman of the Japan Federation of Economic Organizations (Keidanren).

JAPAN

Dec 23, 1999

Carmakers jockey for inroads in slow-growing China market

Staff writer GUANGZHOU, China -- Browsing through glossy catalogs, a couple of men chat with dealers over the counter of a spacious car showroom. Beside them sit three brand-new cars. What appears to be an ordinary scene at any roadside dealership, however, is not run-of-the-mill; one of the cars -- a Honda Accord -- lists for 298,000 yuan, or 3.87 million yen, the amount an average Chinese office worker will earn in 38 years and over 1 million yen more than the equivalent model marketed in Japan. "If things go well financially, I hope to sell 400 (Accord) units a year," said Liang Nu, 45, a dealer handling Honda Motor Co. vehicles. Liang, who also runs a service shop, started the dealership with an initial investment of some 10 million yuan, or 130 million yen. Most of her customers are owners of small businesses, members of the new wealthy class rising in China's market economy, and usually pay cash, she said. For years in China, automobiles were only for high-ranking government officials who had their chauffeurs drive them around. With the market economy taking root in China, however, cars are gradually making public inroads, as taxis and family cars. In the coming century, China is expected to become the world's largest automobile market. Koji Kadowaki, president of Guangzhou Honda Automobile Co., a 50-50 venture between Honda and a local concern, said the Chinese automobile market is now going through the transition from a government-oriented market to one driven by private demand. "In the Beijing area, 70 percent to 80 percent of people who own cars are private citizens, and we would like to boost our business by focusing more on individual customers," he said. According to an estimate by the Chinese government, private-sector demand for autos, including taxis, accounted for 48.9 percent of China's total sales of passenger cars in 1998. In 1991, the level was 26.3 percent. With the prospect of that demand growing still further, Honda began test production last year at facilities it took over from PSA Peugeot Citroen of France. Having achieved a 40 percent local- content requirement imposed by Chinese authorities, the automaker began full-scale production last month. It plans to produce 25,000 units next year. Despite the high prices, Kadowaki said his firm has already received orders for some 20,000 units from its dealers across China. In addition to the existing model, which has a 2,300cc engine, Honda will start producing a new Accord model with a 2,000cc engine next March, a move intended to attract more individual consumers. Honda is not alone in hoping to cash in on China's potentially giant market -- driven by a population of some 1.2 billion. Toyota Motor Corp., Japan's leading automaker and the world's third-largest, is waiting for the green light from Beijing to start production in Tianjin, in northern China. When the approval is forthcoming, Toyota, which already has a joint venture for engine production in Tianjin, will form yet another venture with its engine partner to produce passenger cars with 1,300cc engines. Likewise, Suzuki Motor Corp., Japan's leading mini-vehicle maker, has been steadily increasing production of its Alto compact car, powered by an 800cc engine, in its joint venture. Other firms have also seen the potential. The Volkswagen group plans to introduce a new compact car to the market, targeting families and other private buyers. Volkswagen controlled 54 percent of the Chinese auto market in the first eight months of this year. While everyone expects China to eventually evolve into a huge market, the question remains as to how quickly the market will grow. Hoping to nurture its domestic auto industry, the Chinese government began in the mid-1980s to promote cooperation between domestic manufacturers and foreign automakers in the form of technological transfers and joint ventures. Domestic demand for automobiles, however, has so far failed to live up to the government's expectations. The government had projected that domestic passenger car production would be between 1.1 million and 1.3 million units by 2000, but actual production in 1998 came to around 500,000 units, said Miao Wei, a former government official. The number of cars sold last year stood at 508,284 units, according to government statistics. "The task we face at the moment is to stimulate consumers and expand the market," said Miao, president of Dongfeng Motor Corp., Honda's local partner for engine production. "It is easy to build a factory, but difficult to sell cars to consumers." The reason for the weaker-than-expected growth in consumer demand, many observers suggest, is that China lacks some of the features common in Japan and other major auto markets. For instance, loans for prospective buyers to purchase a car are rare in China because of the difficulty in evaluating an individual consumer's income. The after-sales market has also yet to be established here. During the era of the planned economy in China, the government was the sole buyer of automobiles and had its own departments to repair and provide maintenance, Kadowaki said. As a result, he said, there was virtually no need for an after-sales market. Fully aware of the importance of developing such a market, Honda has been telling its Chinese dealers to go beyond just selling cars, urging them to provide comprehensive customer services, ranging from parts replacement to full-scale maintenance. Now that China has sealed a deal with the United States over being granted a seat on the World Trade Organization, Japanese and other foreign automakers are likely to yet another turning point in their operations here, possibly in a favorable direction. The deal, which has taken Beijing significantly closer to WTO membership, is expected to have a positive impact on foreign players with a competitive edge, said Nobuyoshi Yoshida, president of Auto Business Practice Institute Inc. The Chinese government, which until now has maintained tight controls over the auto industry, will have to loosen up and adopt a freer market mechanism when it becomes a WTO member, he said. "There will be healthier competition in China's automobile industry, and those with a competitive edge will be able to expand in the Chinese market," he said.

JAPAN

Dec 7, 1999

Isuzu nears agreement on China bus venture

Staff writer GUANGZHOU, China -- Isuzu Motor Co., a Japanese truck and bus maker, will reach a basic agreement with local authorities, possibly by the end of the month, over a joint venture to produce large buses here, a local government official said Tuesday. Zhang Guang-nin, deputy mayor of Guangzhou, Guangdong Province, said Isuzu and the local government are likely to reach a basic agreement soon. Although he declined to elaborate on the state of negotiations, he suggested the joint venture may start next year. Isuzu and Guangzhou Auto Group Corp., based in Guangzhou, have already agreed to the joint project, Zhang said. The details of the project have yet to be decided. If approved, the project will mark Isuzu's first bus output in China, although the Japanese automaker has been assembling small trucks through its joint ventures with local concerns. The Guangzhou Auto Group launched production of Honda Motor Co.'s Accord passenger car last year at their fifty-fifty joint venture. The Chinese government is promoting joint ventures with foreign manufacturers as a way to help its local automotive industry grow. Meanwhile, Guangzhou Honda Automobile Co., affiliated with Honda Motor Co., plans to boost its annual production 2.5 times to 25,000 units starting in late April amid robust sales, Honda officials said Monday. The company, a joint venture between Honda and a local concern, started making the Accord, with an engine displacement of 2,300cc, last March. The company also announced that it now procures more than 40 percent of its parts from local suppliers, clearing the 40 percent standard set by the Chinese government, Honda officials said. As for getting the passenger car project on track, the joint venture company had manufactured about 8,500 units by the end of October, mainly by assembling cars with imported parts. "We started full-scale production on Nov. 18, and the Chinese government acknowledged that our local procurement reached 40 percent on Nov. 26," said Koji Kadowaki, president of the joint venture. He said this was the first time he'd seen this kind of progress in only 17 months. In order to reach out to more Chinese consumers, the automaker plans to add a 2,000cc model to its lines next March.

JAPAN

Nov 26, 1999

Retailers rev up for holiday shoppers

JAPAN

Nov 23, 1999

Foreign carmakers wedge feet in door at Toyohashi

JAPAN

Nov 22, 1999

Focus needed to revive Made in Japan sheen: Okuda

JAPAN

Oct 28, 1999

Fiat shareholder sees strength in alliances

JAPAN

Oct 21, 1999

Tokyo Motor Show: Ford targets baby-boomer offspring

JAPAN

Oct 14, 1999

Auto firms pin sales hopes on show

JAPAN

Aug 18, 1999

Transport plans 'green tax' as bait for cleaner cars

JAPAN

Jul 20, 1999

Tour agents target families to survive lean times

JAPAN

Jun 29, 1999

Telecom Realignment: Rival carriers prepare to combat Goliath

Second in a five-part series on reorganizing the domestic telecommunications industry

JAPAN

Jun 28, 1999

Telecom Realignment: NTT set to enter global fray

First of a five-part series on reorganizing the domestic telecommunications industry

JAPAN

Jun 7, 1999

Enterprise Spirit: Internships turn jobless into entrepreneurs

28th in a series of occasional articles about venture businesses

JAPAN

May 21, 1999

New runway to come up short; soccer deadline eyed

JAPAN

Apr 30, 1999

Ready for 2000?: Shinkansen on track for Y2K compliance

Fifth in an occasional series on Japan's Y2K preparedness

JAPAN

Apr 23, 1999

Ready for 2000?: ANA plugging away at 'millennium bug'

Third in an occasional series on Japan's Y2K preparedness

JAPAN

Apr 22, 1999

Yunnan pins tourism hopes on expo

JAPAN

Mar 30, 1999

Maritime cargo carriers sail abroad for more lucrative waters

JAPAN

Mar 22, 1999

Italian theme, cheaper goods key to joint outlet mall

From easily navigable train stations to the helpfulness of its municipal staff, Tokyo has earned high praise for its commitment to accessibility for disabled travelers.

[Rebroadcast] Japan is doing better on accessibility than you may think

Rows of irises resemble a rice field at the Peter Walker-designed Toyota Municipal Museum of Art.

The 'outsiders' creating some of Japan's greenest spaces

By Stephen Mansfield

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