By Christopher Johnson
TOKYO – Japan was not a fun place to own a car even before wide-ranging recalls from Toyota and Honda sullied the country’s reputation for producing quality automobiles.
Roads are crowded, narrow and dull; highway speed limits top out at 80 kilometers per hour, and the toll fees are steep – drivers on the 325-kilometer trip from Tokyo to Nagoya before the financial crisis broke last year had to pay 7,100 yen (US$77.47). Within Tokyo, a parking space costs the equivalent of US$300 a month and up.
Regulations and taxes add to the pain of car ownership, helping to feed an “auto apathy” that for years has dragged down sales of new and used cars, to the extent they are now at levels seen in
the 1980s, according to the Japan Automobile Dealers’ Association. With the latest economic crisis also having an impact, domestic industry-wide sales will drop 8.5% to 4.3 million vehicles in the year ending March 31, the Japan Automobile Manufacturers Association said last year.
That is showing up in the income of Toyota, the world’s biggest automaker. Last May, the company reported an annual net loss of US$4.4 billion, its first loss in 70 years. A year ago, it closed all of its plants across Japan for 11 days to reduce output and stocks of unsold vehicles. In the year to last March, Honda was the only one of Japan’s three top automakers – Nissan is the third – to post a profit.
An executive at a major Japanese automaker, who doesn’t want his name used because of his company’s dealings with Toyota, said young Japanese in particular were turning away from automobiles. “In the past, having a catchy car was considered to be a young man’s dream. It is not the case any more,” said the executive. “This phenomena is called kuruma-banare [leaving from the car] in the Japanese automobile industry.”
The hassle of owning a car in Japan begins at the dealership, which present similar-looking vehicles for identical prices. Nor is it easy to trade in an old car, or to sell one.
Kumiko Fukushi recently tried to sell her smooth-running Toyota Vista, with 60,000 kilometers on the clock. In North America, it might fetch US$3,000 or more. In Tokyo, several dealers offered Fukushi “minus 30,000 yen” (about US$330), meaning she would have to pay the dealer to take her car to cover recycling fees charged to junk a car.
Auto owners also face a vehicle inspection every year or two, which can cost upward of $1,000 a year, even for a perfect car. Japan resident blogger “Dave Webb” calls these inspections “the motoring scourge in Japan”, “the most common complaint people will have”, and “a proverbial spanner in the works” of the industry as a whole.
Next comes repairs. One Toyota dealer told Fukushi it would cost about $2,000 to overhaul a faulty air-conditioning system. A nearby Autobacs parts shop eventually fixed it with a $50 shot of freon.
Toyota, at the forefront of the recent spate of recalls involving a variety of problems, lists on its website 12 models as being involved, with production dates going back to 2004. Estimates of the number of vehicles involved range upwards from 8.5 million. Honda this month added 437,000 vehicles to its 15-month-old global recall for faulty airbags. Last month, it recalled more than 600,000 cars on concern that window switches could overheat.
While service standards generally remain high in Japan, many consumers and critics note a perceived decline in product quality and are concerned about the implications. “I am most concerned about a possible loss of trust in Japanese products,” Tomohiro Koseki, who writes books about Japanese factories, told the Asahi newspaper. Toyota “should be well aware of its responsible position vis-a-vis Japanese industry as a whole. A loss of confidence in Toyota would have an ill-effect on its many sub-contractors and affiliates.”
The Japanese auto executive said the Toyota recall would have a negative effect on the economy “through its supply linkage. It would have also a negative effect psychologically for the decline in Japanese pride in ‘industrial excellence’.” It’s a hard lesson for other companies in Japan, he says. “Nothing is infallible, including the ‘Toyota Way’.”
The company introduced the 14 principles of the “Toyota Way” in 2001, “to provide the tools for people to continually improve their work”. With or without the help of this guiding philosophy (Principle 1: Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals), the company jumped from a distant third in world sales in 2000, with fewer than 6 million behind GM’s 8.1 million and Ford’s 7.3 million, to be the world’s number one automaker eight years later, with sales of 9.2 million as GM output remained little changed in the period. Somewhere in that surge, important details in production were overlooked. Toyota is also under attack for its management of the recall.
It was not until February 5, that Toyota chief executive Akio Toyoda, grandson of the company’s founder, appeared in public in response to the global recall announced on January 21. Toyoda, who took over at the company last June, spoke from his company’s home base in Aichi prefecture and sent his message via satellite to reporters gathered at a Toyota office in Tokyo. “I offer my apologies for the worries. Many customers are wondering whether their cars are OK,” he said. When a reporter asked him to speak English, he said, “Please believe me. We always put customers first.”
William Bonds, a British expatriate who has been covering the Japanese auto industry over two decades for Japanese media, is not impressed, or surprised. “Toyota has long had a revered place in corporate Japan, and Japan has long been revered for its corporate management practices. But the truth is that the Japanese fail miserably in actual management. They are fantastic at producing systems – and the Japanese defined the process in auto-manufacturing – but when the system breaks down, they are clueless.”
For consumers, there seems nowhere to go with a complaint. The top brass of Toyota inhabit a fiefdom in Toyota City in rural Aichi, about 300 km from Tokyo. It’s as if Ford and GM were based in Montana or Manitoba, not in the vicinity of Detroit and Toronto. Bonds says Toyota is “arrogant”, a “classic Japanese corporation”. Many Japanese joke that you are more likely to run into a Toyota executive on a golf course in Thailand than anywhere inside Japan.
Masaaki Sato, author of books on Toyota and Honda, took the rare step of speaking out on TV against Toyoda’s slow response to the issue. “He should have come out a week ago,” Sato said. “After all the foot-dragging, he was pushed into a corner.” Sato also questioned Toyoda for having to be pushed by US Transportation Secretary Ray LaHood, instead of approaching consumers first.
The question now is whether customers will believe Toyoda – who is to appear before the US House of Representatives Oversight and Government Reform Committee on Wednesday – in his claim to put customers first.
For years, the Japanese media have ignored protest groups, including former journalists, who rallied outside branch offices of automakers demanding compensation for respiratory illnesses blamed on auto emissions. Little attention was drawn to a court-mediated settlement in August 2007 requiring the government and Toyota, Honda and Nissan to pay 3.3 billion yen to 520 Tokyo residents who blamed diesel gas fumes for causing their asthma and the deaths of 110 people.
With 550 subsidiaries and 320,000 employees worldwide, Toyota has been able to trump the truth with powerful advertising – last October, the company announced a $1 billion advertising venture – and media connections. NIFCO, a major parts supplier for Toyota, for example, owns the Japan Times, the country’s oldest English-language daily.
Critics also note that government pressure on Toyota came from abroad, not Japan, where politicians skew policies in favor of producers, not consumers. Industry Minister Masayuki Naoshima of the Democratic Party of Japan is the former head of Toyota’s labor union. On Friday, responding to criticism that Toyota was handling the issue slowly and took its time to decide on whether its president would go to the US to present the company’s case, Naoshima said the recall was connected with very technical matters, and that Toyota thought it should have officials with expertise speak before congress to prevent any additional trouble, according to a Kyodo News report carried by Japan Times.
Prime Minister Yukio Hatoyama, rather than launch an investigation, responded with muted criticism. “When an event that impairs safety occurs the initiative should be taken to work for the safety of people in Japan and worldwide,” he said.
Christopher Johnson is a freelance writer based in Tokyo
Mohammed Abbasi 