Tokyo's Auto Show Shows More Than Cars
Friday, November 02, 2007PAUL KANGAS: Ford Motor and the United Auto Workers are said to be closing in on a new labor pact. The "Detroit Free Press" quotes people close to the negotiations as saying union leader Ron Gettlefinger and Ford executives are locked in a marathon bargaining session. The paper says a deal could be reached as soon as this weekend. The discussions have been on again and off again for two months, but the union has not issued a strike warning against Ford.
SUSIE GHARIB: One of the highlights of the world auto industry is the semi- annual Tokyo motor show. This year marks the 40th anniversary of the event which has served as a crystal ball for cars of the future. But as Lucy Craft reports, this year it's also a watershed for Japan's auto makers.
LUCY CRAFT, NIGHTLY BUSINESS REPORT CORRESPONDENT: For razzle dazzle, the gee whiz gadgets, the Tokyo motor show celebrates Japans premier industry, at a time when the country's nine car manufacturers have never been in better shape. And yet, there's an irony behind this lavish ode to the automobile. While exports overseas are exploding, making the Japanese the most profitable auto makers on earth, here at home, car sales have shriveled to 30-year lows. And there's no relief in sight, says Shinsei Securities analyst Yasuhiro Matsumoto.
YASUHIRO MATSUMOTO, SENIOR ANALYST, SHINSEI SECURITIES: That reflects the aging society and smaller (INAUDIBLE) of newborn babies. So it's disastrous for any of the auto companies, even Toyota.
CRAFT: Times are so tough, says CSM analyst Hirofumi Yokoi, manufacturers are duking it out even in a segment where it's hard to eke out profits: the cheap and un-glamorous mini-car segment.
TRANSLATION OF: HIROFUMI YOKOI, CAR ANALYST, CSM ASIA CORPORATION: In a word, the Japanese market has become highly limited. So every maker is pulling out the stops, trying to hold onto market share.
CRAFT: Once infamous clunkers, mini cars have gotten spruced up lately and now account for more than a third of all units sold. Still, even fancier mini cars can't staunch the damage, according to Calyon Capital Markets analyst Christopher Richter.
CHRISTOPHER RICHTER, SR. ANALYST, CALYON CAPITAL MARKETS ASIA: Mini cars were very hot until about a year or so ago. And even in the mini car segment, we've seen some significant slowing. So before it was just the big cars. Now really the whole Japanese vehicle market looks like it's dead on arrival.
CRAFT: Low-emission cars headlined the auto show, but a dizzying variety of technologies underscores the fact that the brightest engineers in Japan haven't figured out which one to place bets on. Nissan chief designer Masato Inoue says the company's concept car Pivo 2 shows off the firm's electric vehicle or EV expertise.
MASATO INOUE, CHIEF DESIGNER, NISSAN MOTORS: As a short-distance car, EV is most potential.
CRAFT: But Nissan and its rivals are also experimenting with everything from clean diesel to fuel cells to plug-in hybrids. A viable emission-free car is estimated at 10 to 20 years away from reality.
RICHTER: The first few years of the 21st century are a lot like the first few years of the 20th century. We're seeing a cocktail of new drive trains, where for the last 100 years, it was all internal combustion engines. So people are looking at different things. They don't really know what's going to work or what's going to be successful.
CRAFT: The motor show will be best remembered as a mere transition when it comes to environmentally friendly cars, a mere stepping stone on the road from the gas-electric hybrids of today, to the no emission cars of the future. It's a high stakes race. But it's one that the Japanese, with their solid profit bases, are best situated to lead. Lucy Craft, NIGHTLY BUSINESS REPORT, Tokyo.
