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The Electronic Toll Collection system was introduced in March 2001 amid great expectations that it would ease the notorious traffic jams on Japan’s expressways as it allows vehicles equipped with a transponder to pass through toll gates without having to stop to pay.

However, a year later, it appears there are still too few vehicles using the expensive ETC system to make any difference.

The number of vehicles equipped with “tag” transponders remains extremely low — in April, only 2.1 percent of the daily traffic of 5.74 million vehicles on expressways operated by three semigovernmental public corporations used ETC transponders at toll gates, the transport ministry said. The three public firms effectively operate all of Japan’s expressways.

This rate is too low for the new system to have a significant effect on congestion. According to the transport ministry, at least 50 percent of vehicles need to be equipped with ETC transponders if it is to alleviate traffic jams caused by slow flows at toll gates.

But officials at the Ministry of Land, Infrastructure and Transport say users are increasing — 1.8 percent, or 98,200, of vehicles that passed through toll gates each day at the end of March were ETC-compatible, while the figure had risen to 2.1 percent, or 120,600 units a day, in late April.

They added that cheaper transponders expected to go on the market soon will also help increase the number of ETC users.

“The ETC system has only just begun, and the pace of growth is rather fast compared with, say, that of the car navigation system, which is now very popular,” a ministry official said.

The ETC system has proven quite popular with owners of foreign-made, left-hand drive cars because expressway toll booths are geared for right-side drivers.

But although many of those involved in the system’s introduction are putting on a brave face, the lack of popularity of the ETC system has no doubt dashed the initial hopes of bureaucrats, toll road operators and electronics companies that it would be the forerunner of an emerging market.

“We had predicted that about 1 million ETC (transponders) would be sold in the first year, but the figure is still only 200,000 units,” said Shukuji Goto, general manager at Matsushita Communication Industrial Co.’s automotive electronics division.

The most likely reason for lackluster sales of transponders, which the government has promoted as being state-of-the-art technology, is their price tags. Running mostly in the 30,000 yen to 40,000 yen range, they are simply too expensive for drivers who only use expressways once in a while.

“The price should be around 20,000 yen. Otherwise (significant market penetration) would be difficult,” said Hiromitsu Iwabuchi, assistant manager at Fuji Chimera Research Institute Inc. and an expert on information technology within the automobile business.

While some new models soon to be released are expected to be priced strategically lower, at around 30,000 yen, they are still expensive compared with those sold in other countries that have introduced ETC systems. In North America, for example, transponders cost about one-tenth of those in Japan, at about $20 or $30.

Land ministry officials explained that technologically advanced systems are needed in order to adopt a unified, standard system that can be used on all of Japan’s expressways, which charge different tolls.

And not only is the toll system more complex than in other countries — the tolls themselves are also much higher.

As any miscalculation in the expensive fees would be sure to cause an outcry from toll road operators as well as drivers, Japan’s ETC system needs to be more advanced and accurate, the officials said. A more complex system also discourages would-be counterfeiters, they added.

But critics point to another reason the gadgets are so expensive.

“Japan’s ETC system was designed for use as a component in the intelligent transport system, which the (former) construction ministry wanted to promote for its own interests,” claimed Kodo Ogata, who runs Toll Road.org, a citizens’ group that studies problems involving Japan’s expressways.

The intelligent transport system refers to a combination of future information technologies that will see a system of smart vehicles and road systems incorporating data communication between vehicles, roads and other infrastructure that would collectively create smoother traffic flows.

On the list of possible ITS services are ETC, advanced car navigation systems, an automatic driving system and on-vehicle payment services at parking lots, gas stations and drive-through shops.

Indeed, Japan’s ETC system seems to have excessive capabilities for a system simply designed to collect tolls.

For example, the system can download data at 1 megabit per second even when the car is parked, although there is no use for that capability at present.

Users must also first own an ETC-compatible credit card, which is inserted into a slot in the transponder.

This is because studies are ongoing on the use of the credit card and the ETC wireless system for in-vehicle shopping and payments, including bills at parking lots, gas stations and other drive-through businesses. Again, however, there is no immediate prospect of private-sector companies moving into such businesses for the time being.

According to a 1999 projection by a telecom panel under what was then the Posts and Telecommunications Ministry, ITS-related products and services were expected to create a new market totaling 60.3 trillion yen by 2015, and the ripple effect to other industries would reach 100 trillion yen.

So far, however, few attempts by the private sector to realize such scenarios for the ITS market have been successful, except for the car navigation system.

Many in the auto and electronics industries agree that further incentives, including an increase in ETC-only lanes and more discounts for ETC users, will be necessary to make the system more popular.

Ogata, who was a longtime employee of Japan Highway Public Corp. and a former president of Highway Toll Systems Co., pointed out that government ministries have rushed to fight jurisdictional disputes over ITS for their own interests, rather than those of consumers.

He alleged that single-function ETC transponders that are cheaper, like those used in other countries, would have been sufficient for collecting expressway tolls, but the land ministry introduced the more expensive system to secure a foothold in the potentially huge ITS market.

However, land ministry officials and ETC-related manufacturers maintain that the current advanced system is necessary to secure a strong foothold for future ITS-related services.

“I think the recent media criticism of the ETC system is very shortsighted,” said Goto of Matsushita Communication Industrial Co. “Ten years down the road, the public’s evaluation of the system will be totally different.”

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