The government plans to promote a new category of “microcompact” vehicles, the first new category of vehicle to be established under the Road Transport Vehicle Law since 1963. These new cars will likely appeal to elderly people and others who will use them for shopping or visiting places near their homes. Most of them will be electric and much more environmentally friendly than current automobiles.

Larger than “Category 1” motorcycles that have an engine displacement of 50 cc or less, but smaller than light vehicles with 660 cc engines that can carry four people, these single- or twin-seater cars will be well suited to the narrow streets of Japan’s urban neighborhoods. The vehicles will also be useful in rural areas where declining populations have driven bus services out of business.

Easy to drive and park, and built with safety in mind, microcompact cars will be good for transporting smaller items. With so many positive points, one wonders why the government took so long to change the rules and create this new category. It should have acted sooner.

Hopefully, the government’s process for establishing new regulations is being streamlined. The moribund bureaucratic regulations of the past must be updated to allow for this kind of innovation. Many details must be worked out before the microcompact cars become a regular part of daily life, including safety regulations and a reasonable tax rate. Their introduction will hopefully spark innovation in other product areas.

The central government should strive to encourage this kind of innovation. Without it first establishing a new category, automobile makers cannot even get started. To mass produce microcompact cars, manufacturers need assistance and adequate regulatory structures. After that, Japan’s highly developed consumer market can take over. Once on the market, microcompact cars will surely tap into Japan’s love of small, cute things, practical comforts and convenience.

To rev its idling economic engine, Japan will need more products like this, but just as important it will need to improve its regulatory system and government oversight. The future of the economy will depend on companies that can innovate and on a bureaucracy that can promote new products in a prompt, efficient and safe manner.

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