Recently, I returned from a 10-day visit to Asia. Our son, Kendall, lives in Kanasawa, Japan, where he teaches English to Japanese students. While the trip was a personal vacation, we couldn’t pass up the opportunity to visit some of Japan’s iconic carmakers and get the flavor of recent, current and prospective future trends.
Tokyo, the world’s largest metropolitan area with over 30 million residents, serves as world headquarters of Honda Motor Corporation. Honda, which first started as motorcycle manufacturer in 1948 and later moved into building one of the largest and most successful worldwide car manufacturing companies, has a high-rise corporate headquarters not far from the center of the city. Honda has current production models in its headquarters building display area, which looks surprisingly like a new car dealership showroom. On display are motorcycles, cars and light duty utilitarian vehicles.
Toyota, on the other hand, was founded in 1937 and is headquartered in a new building in the core of a city of its name, Toyota City. Toyota holds a large share of the Japanese market and a significant share of the worldwide market. Toyota builds cars, trucks and equipment and has a mission that calls for the manufacturing very high quality products.
It wasn’t long after both Toyota and Honda were founded as companies that both entered the US auto markets. Now they both market worldwide and maintain sizable international market shares. Without a doubt Toyota and Honda as well as the other Japanese-based car manufacturers (Nissan, Suzuki, Subaru, Mazda and Mitsubishi) have had a big impact on car design, car culture and industry direction over the past 50 to 60 years. And without any doubt they will for many years into the future.
It was interesting to see the direction of Honda and Toyota in their homeland. Both are investing heavily in hybrids, plug-in hybrids, fuel cell hydrogen, compressed natural-gas, and even fully electric cars. At least to some degree Honda and Toyota are pacing the development of alternative power sources for the worldwide automotive industry. Amazing technologies are being developed right here in the good old USA, but the pressure is on from Asia and Europe, so no auto manufacturer anywhere in the world can rest on its laurels.
The culture trend of the automotive sector in Japan is toward smaller and smaller cars. An entire new sector of the market, being filled by all of the domestic manufacturers, is for micro cars that are powered by tiny engines often smaller than 1,000 cubic centimeters. While I don’t expect that trend to take hold in the USA anytime soon, it certainly is receiving broad support from Japanese consumers. That is driven in part by the fact that all petroleum for powering cars, trucks and other transportation mobility in Japan is imported. And as a result is much more costly than here in the US.
Yet if fuel prices go higher and higher here, the vehicles that are the most efficient in the world are not only being developed but are already in mass production all over Japan. Worldwide auto manufacturing will follow the efficiency trends and the drive for significantly higher fuel economy results.
That alone makes a powerful and compelling statement — that the long sought high efficiency in the auto sector is much closer than many realize. The next step is to get the same comparable or similar mileage for vehicles that Americans are most accustomed; larger cars, pickups, vans and SUVs.
Tim Jackson serves as president of the Colorado Automobile Dealers Association