Why Japan Wants To Kill The Kei Car, And Why They Shouldn't

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This is The Morning Shift, our one-stop daily roundup of all the auto news that's actually important — all in one place at 9:30 AM. Or, you could spend all day waiting for other sites to parse it out to you one story at a time. Isn't your time more important?

1st Gear: Kill Everything You Love


There's a fascinating take in the WSJ today on Japan's peculiar and isolated car market I think everyone should read. It talks about how the peculiar Japanese automotive tastes mean that their car companies essentially produce vehicles for their home market that they can't sell most other places.

What you end up with is companies like Honda and Toyota making two classes of cars: JDM and Everyone else. For example, Honda doesn't even sell the Civic in Japan anymore but they sell a shit ton of the tiny kei-car N Box. That's the opposite of Honda's experience everywhere else. Suzuki is wildly popular at home and failed in the U.S.


While this makes American and European car nerds insanely jealous, the reality for Japanese automakers is that they're producing cars that many believe only fit Japanese tastes. This is the 'Galápagos' effect.

"The Japanese market is Galápagos," said Shigeru Shoji, chief executive of Volkswagen Group Japan KK, on the sidelines of the Tokyo Motor Show. "You can test things in Japan. But even if it turns out to be an attractive product in Japan, it would be hard to make it a universal and global product," he said. That can hurt Japanese car makers, which have been slow to offer large luxury vehicles in China and diesel engines cars in Europe.


In the same way, it's tough for foreign automakers to compete in Japan (although there are other, more complex reasons at work there as well).

The argument then is that, perhaps, carmakers in Japan should stop making Kei cars. As Nissan's Vice Chairman said "I think it's time to think about it."


There are two reasons why I think this is wrong.

1. As the author points out, Suzuki does well in Japan and in India, which have similar needs. A lot of the growth going forward is going to be in places that are good markets for small, efficient vehicles.


2. Suzuki could have done better in the U.S., I believe, had they introduced the higher quality small cars they were building elsewhere here. The Buick Encore is a smaller car many didn't think would do so well.

Do I think Americans would all run out and get Kei cars? Absolutely not, but three-cylinders are coming back and vehicles like the original Scion xB were popular with a broad segment of people because they were cheap and high quality. I'm curious how the Mirage does, although I'd argue that's mostly just cheap.


2nd Gear: Why GM Isn't Writing The Government A Check


Dan Akerson will not be CEO of GM for much longer, so he can say hilarious unpopular things to reporters. As David Shepardson reports, Akerson told the National Press Club he'd be open to "lawsuits" from shareholders if he just gave money away.

I'm hoping the real reason he isn't doing so is because, you know, he doesn't have to. There are better ways to spend $10 billion and wasting it on a good will campaign is bullshit.


What GM needs to do is invest $10 billion in the United States and just keep pointing that out. Here's the best quote:

Akerson was asked why other bankrupt companies — like Hostess Brands — didn't get taxpayer bailouts. "Was it a good investment? Was the automotive industry more central to the prosperity of this country than Hostess Twinkies or CupCakes? I would argue these are high-paying jobs in communities that the government I think had a compelling interest to invest in," Akerson said.


3rd Gear: Global Auto Sales May Be 100 Million In Four Years


How many cars will automakers sell this year? The experts say 82 million. How many will they sell in 2018? Analysts at IHS Automotive say 100 million is doable.

Via Brent Snavely:

"Europe is probably at the very end of their unemployment losses," he said.

But even with Europe recovering, the real opportunities for automakers will be global markets ranging from China to Thailand and Brazil to Chile.

"In every major economy in the world we are expecting economic growth," Chesbrough said.


4th Gear: Will Alan Mulally Just Leave Already?


Alan Mulally gets to take one helluva victory lap because, let's face it, he led Ford through the Carpocalypse. But now all anyone wants to talk about all the time is: When is he going to Microsoft? Is he going to Microsoft? Does he use a Surface Tablet?

Per Bloomberg:

"It is a distraction at a time when they need to focus on plants, products and people — not one person," Krebs said. "They are launching more products next year than any time in the history of Ford Motor Co. They need to focus on the business."

Chief Executive Officer Mulally, Executive Chairman Bill Ford and other company leaders have frequently reiterated a 13-month-old plan that called for Mulally to stay at the helm of the second-largest U.S. automaker through at least next year. While Ford has established a successor in Chief Operating Officer Mark Fields, questions over timing risk a return to the executive infighting that afflicted the pre-Mulally Ford, said a person at the company with knowledge of the matter, who asked not to be identified discussing managers' roles.


5th Gear: Mark Field Is Already Measuring For A Kimono Closet


Not to mention, the people at Ford are already acting as if Mulally is out the door according to this story from Deepa Seetharaman.

COO Mark Fields is the guy everyone expects to take over as he has the best understanding of product, longest track record, and best hair of anyone in the company.


What I found interesting was the note that "he is unlikely to stay at Ford through 2014, two people close to the automaker said."

Reverse: Rocket Man

On December 17, 1979, Hollywood stuntman Stan Barrett blasts across a dry lakebed at California's Edwards Air Force Base in a rocket- and missile-powered car, becoming the first man to travel faster than the speed of sound on land. He did not set an official record, however. The radar scanner was acting up, and so Barrett's top speed—739.666 miles per hour by the most reliable measure—was only an estimate. Also, he only drove his rocket car across the lakebed once, not twice as official record guidelines require. And, none of the spectators heard a sonic boom as Barrett zoomed across the course.



Neutral: Kei Cars: Would They Work Here? Am I wrong?

Photo Credit: Getty Images