1 8.5 DOT - HS . A34 •ORT NO. DOT-TSC-NHTSA -80-16 -805 481 no . I DOT- TSC- NHTSA - 80-16 ECONOMIC STATISTICS AND INFORMATION CONCERNING THE JAPANESE AUTO INDUSTRY Gary R. Saxonhouse Highway Safety Research Institute University of Michigan Ann Arbor MI 48109 FINAL REPORT DECEMBER 1980 DOCUMENT IS AVAILABLE TO HIE I'UBL THROUGH THE NATIONAL. TECHNICAL INFORMAT ION SERVICE, SPR I NG FT E l.D, VIRGINIA 22161 Prepared for U.S. DEPARTMENT OF TRANSPORTATION NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION Office of Research and Development Washington DC 20590 NOTICE This document is disseminated under the sponsorship of the Department of Transportation in the interest of information exchange.. The United States Govern- ment assumes no liability for its contents or use thereof. NOTICE The United States Government does not endorse pro- ucts or manufacturers. Trade or manufacturer's names appear herein solely because they are considered essential to the object of this report. NOTICE The views and conclusions contained in this docu- ment are those of the authors and should not be interpreted as necessarily representing the official policy or opinions, either expressed or implied, of the U.S. Government. - Technical Report Docoioototii— Pag* 1. R«Hrf No. 3. Gooonooont Accession No. 3. Rtcirinl'i Catalog No. D0T-HS-805 481 4. Title and Subtitle 5. Report Dot* Economic Statistics and Information December 1980 Concerning the Japanese Auto Industry, Porfonoing Organization Cod© DOT/ISC So Performing Organization Report No. 7. Author's) DCT-TSC-NHTSA-80-16 Gary R. Sgtxonhouse UM-HSRI-79-86 t. P orforming Organisation Nanto aid Address 10. Work Unit No. (TRAIS) Highway Safety Research Institute HS159/R1405 1 1 University of Michigan . Contract or Grant No. Ann Arbor, Michigan 48109 DOT -TSC-1616 13. Type of Report and Ported Covered 12. Sponsoring Agency Name and Address U.S. Department of Transportation Final Report National Highway Traffic Safety Administration Office of Research and Development 14. Sponsoring Agancy Coda D0T/NHTSA Washington DC 02590 ____ _ _____ 15. Supplementary Molls U.S. Department of Transportation Research and Special Programs Administration Under Contract to Transportation Systems Center Kendall Square. Cambridge MA 02142 16. Abstract This is the final report of a project that had four objectives: 1. Locate Statistics--Identify the Japanese agencies that receive stat- istical data on the automobile industry; determine the rules and laws governing public accessibility to the data; identify when, where, and how the data is published; identify the private sources of business statistics; and compare reports published in Japanese with those available in English. 2. Determine Research and Development and Capi tal -Present statistics relating to research and development expenditures and capital investment by the Japanese automobile industry. 3. Identify Government Incentives- -Identify and present details on tax advantages and incentives given to industry; identify research and develop- ment projects financed by Japanese government. 4. Survey Japanese Economic and Business Literature- -Survey Japanese lit- erature to locate forecast of auto demand and predictions of capacity changes; evaluate the reliability of the forecasts and the techniques utilized; interview Japanese economists and industrial consultants relative to the forecasts r i.'ChVir; i MENT OF transportation 17. Key Words IS. Distribution Stetjwsentf /! [\ n r~ - 1 h Japanese Auto Industry /Qg] | DOCUMENT IS AVAILABLE TO THE PUBLIC International Competition THROUGHTHE NATIONAL TECHNICAL JTJE, 1 1 E ttD, INFORMAfrlON SE Ffy NGE Regulation ‘ Government 1 1 1 V 1 R G 1 N 1 Ap 22 1 6 1 | Research and Development 1 nx/p^tmpnt Incenti ves 19. Security Cleosif. (of Ai® r sport) 30. Security Claitil. (of Hub i»g>) 21» No. of Pagas 22. Ptiti Unclassified Unclassified 268 , ... - - •». • .... * •*.* PREFACE This document is the final report for a study entitled "Economic Statistics and Information Concerning the Japanese Auto Industry." The study was conducted by The University of Michigan's Highway Safety Research Institute in association with The University's Department of Economics and the Center for Japanese Studies, and selected consultants. The Transportation Systems Center of the U.S. Department of Transportation sponsored the study as part of its support of the automotive fuel economy program of the National Highway Traffic Safety Administration. Since 1967 Japan has been the second largest producer of motor vehicles in the world. During the 15-year period from 1961 to 1976 inclusive, Japanese motor vehicle production increased 963 percent, a compounded annual growth rate of 16.3 percent. (By comparison, U.S. production during the same period increased 172 percent for an annual compounded growth rate of only 3.7 percent.) In 1978 Japan produced over 9 million vehicles, which was over 70 percent of U.S. production in the same year. In its motor vehicle exports Japan has advanced more rapidly than any other country in the world. It moved into sixth place in 1959; fifth place in 1963; fourth place in 1965; third place in 1968; second place in 1971; and first place in 1974. It has held that posi- tion since, and is continuing to increase its relative share. In the United States, three Japanese firms are among the top four importers. And the Japanese products are generally considered as among the best designed and attractively priced vehicles available in the United States. Because of the increasing importance of the Japanese-produced vehicle in the United States, there has been a need to more carefully evaluate "...the impact of the U.S. fuel economy, safety, and emis- sions control regulations on the Japanese companies and to provide a data base for comparing the performance of the U.S. automobile indus- try with the Japanese automobile industry..."* There is generally available in the United States, and to U.S. government officials, information on the Japanese auto industry. How- ever, much additional information exists only in Japan and in the Japanese language. This is especially true of detailed statistical information on capital investment and research and development in the industry. Also, the American policymakers do not have the benefit of much information that is found in the Japanese trade press and other local sources within Japan. It is important that these policymakers be aware of the current sentiment within Japan towards that nation's automobile industry. Such information is important in the continuing evaluation of the U.S. government's policy decisions that impact Japan's auto industry. *RFP TSC/322-0014-GTF, Statement of Work. The penetration into the U.S. of the Japanese passenger automobile requires more reliable and detailed information on Japan's automobile industry. Because of the unique peculiarities of the Japanese language, and the shortage of persons within the United States having a working knowledge of Japanese, unusual steps had to be taken to collect the necessary information. This has been done by organizing a team of Japanese-speaking specialists with a background and understanding of the automobile industry. They have identified Japanese statistical data sources, collected the information, and presented it in usable form. This final report presents the results of this effort. This study was divided into four task objectives: Task l--Locate Statistics . This task involved the identi- fication of Japanese agencies that receive statistical data on the automobile industry; a determination of the rules and laws governing public accessibility of the data; the identi- fication of when, where, and how the data is published; the identification of private sources of business statistics; and a comparison of reports published in Japanese with those made available in English. Task 2--Determi nation of Research and Development and Capital Investment Procedures . First, known statistics relating to research and development expenditures by the Japanese auto industry were collected; the same detailed analysis was then made on capital investment by the Japanese auto industry. Task 3--Identification of Governmental Incentives . In this task, the assignment was to identify tax advantages and incentives given to industry and to identify research and development projects financed by government. Task 4--Survey Japanese Economic and Business Literature . This task involved a survey of Japanese literature to locate forecasts of auto demand and predictions of capacity changes; there was then an evaluation of the forecasts for reliability and techniques utilized; and, finally, there were interviews with Japanese economists and industrial consultants relative to the forecasts. In the accomplishment of the study objectives the project was divided into three separate phases: Phase I--Initial Literature Research . The literature search involved an examination of the reference bibliography cards at The University of Michigan Japanese language library. Significant data were extracted and filed for compilation into final reports. iv , Phase II -- Field Investigation in Japan . This phase included contacting governmental agencies and private organizations in Japan for information pertinent to the study. Appendix A shows the organizations that were contacted. Phase III -- Documentation Development and Presentation . The final phase was the documentation development and presentation. There were two major reports: the interim report, published mid-way through the