“Demotorization” in Japan Prompting Assessment of Impact on Economy and Re-Evaluation of Business Plans
Japan has become the first major developed country where automobile ownership is shrinking. The most recent survey by the Ministry of Land, Infrastructure, Transport and Tourism showed that the number of automobiles owned, including minicars and motorcycles, totaled 79.08 million units at the end of March 2008. This is a decrease of 0.2% from a year earlier and marks the fourth straight month of decline.
|New car sales and ownership in Japan. Click to enlarge. Source: Nikkei|
A story in the Nikkei assess the impact of “demotorization” on business and the economy.
Recently, executives of the Japan Automobile Dealers Association were disheartened by a forecast of future car sales made by the association staff that will be included in its Dealer Vision outlook to be publicized in early August. The forecast puts sales in 2020 of cars with engines of over 660cc at less than 3 million vehicles, a steep plunge from 3.43 million in 2007.
The forecast poses a threat to the Japanese economy, which has heavily relied on motorization for growth. Sectors directly associated with automobiles alone, such as automakers, used car dealers, car accessory makers and marketers, and fuel suppliers, produce 40 trillion yen [US$373 billion] in annual sales, and the central and regional governments invest a combined 7.8 trillion yen [US$72 billion] a year to construct and repair roads.
...As Japan becomes increasingly demotorized, companies will need to seek out new business opportunities that arise as a new social infrastructure is built.
The Nikkei notes that the decline in car ownership is prompting a wide range of sectors including retail, restaurant, construction and real estate to re-examine their business models.
In late May, the Japan Federation of Construction Contractors recommended that construction companies promote urban developments with public transportation systems serving as the means of travel.