Raw Japan

Yes, there is a difference between American and Japanese cars

By Bob Lutz The opinions expressed are his own.

A lot of words have been written in the past few post-tsunami weeks about the negative impact of the disastrous tragedy on the short-term future of Japanese cars in the U.S. market. In parallel, many articles proclaim this to be a “historical window of opportunity” for the “Detroit Three,” now able to deliver to waiting customers an abundant supply of new vehicles while, at Toyota, Honda and Nissan, the cupboard is bare.

It’s telling that we’re *not* hearing the Japanese-brands inspired propaganda offensive of a few years back, when the media duly repeated that “there is no longer such a thing as an American car or a Japanese car.” The Japanese, it was stated, now all have plants in the U.S., whereas most U..S companies import components from the Far East, or Latin America,  thus compromising the promise of saving U.S. jobs. For buyers with a patriotic streak, it was all-American-apple-pie-OK to buy a Japanese brand, these being “just as American” as a Ford, Chevrolet, Dodge or Jeep. The (then) World’s Smartest and Finest Car Company, Toyota, even placed ads asking who’s more American? Toyota USA, adding manufacturing jobs and plants in the U.S., or the Detroit Three, busily, at that time, laying off workers and shuttering plants?

Fast-forward to the earthquake and tidal wave of 2011: the allegedly red-white-and blue Japanese brands suddenly find their supply lines dried up, while the supposedly import-component laden domestic cars, (albeit with some minor work-around shortages) continue to deliver a river of new vehicles, unabated. And, thus, another popular myth bites the dust.

In the past months the Detroit Three have, in fact, come roaring back. The Chevrolet Malibu, the 2007 “Car of the Year,” has shouldered past the Japanese brands and is now the number one car in the mid-size segment. Even more astonishing is the Chevrolet “Cruze,” a best seller around the world, and now America’s number one compact car, relegating the perennial favorites, Honda Civic and Toyota Corolla, to the runner-up spots.

Will all this Detroit resurgence be reversed when Japanese car supplies build up again? I predict it will not.

The current weakness of the Japanese brands goes beyond the natural catastrophe that slowed output. The roots of the end of the nation’s infatuation with Japanese cars go way deeper; more profound, underlying factors are at work. The manifest ineptness on the part of Toyota in dealing with the unintended acceleration crisis has permanently taken that company from “God-like” to “just another good car company.” They, and other Japanese brands, have also suddenly developed a curious inability to produce winning designs. Gone are the Hondas that scream “buy me” thanks to their lovely proportions and superb interior: evidence of the cost-cutting now abounds.

from Russell Boyce:

The politics of bowing in Japan – How low do you go?

By Michael Caronna, Chief Photographer Japan

In Japan nothing says I'm sorry like a nice, deep bow, and lately there's been a whole lot to be sorry for. Ideally the depth of the bow should match the level of regret, allowing observers to make judgements about how sincere the apology really is. Facing massive recalls Toyota President Akio Toyoda and Toyota Motor Corp's managing director Yuji Yokoyama faced journalists at separate news conferences.

Toyota Motor Corp's managing director Yuji Yokoyama (R) bows after submitting a document of a recall to an official of the Transport Ministry Ryuji Masuno (2nd R) at the Transport Ministry in Tokyo February 9, 2010. Toyota Motor Corp is recalling nearly half a million of its flagship Prius and other hybrid cars for braking problems, a third major recall since September and a further blow to the reputation of the world's largest automaker.      REUTERS/Toru Hanai

Toyota Motor Corp President Akio Toyoda bows at the start of a news conference in Nagoya, central Japan February 5, 2010. Toyota Motor Corp President Toyoda apologised on Friday for a massive global recall that has tarnished the reputation of the world's largest car maker. REUTERS/Kim Kyung-Hoon

Car Wars: Hyundai climbs with Toyota’s model

As a child in the early ’80s, I remember spending a summer in Seoul and taking a trip with relatives to the countryside in a Hyundai Pony, South Korea’s first homegrown car. I spoke no Korean, but learned one word quickly enough: “lemon”.

Hyundai Motor has certainly come a long way since then.

Thirty-four years after introducing the Pony hatchback at the Turin Motor Show, Hyundai is the world’s fourth-largest carmaker, surpassing Ford Motor in the first half of this year. With the rest of the industry reeling from slumping sales, Hyundai’s charge has been especially conspicuous this year as it grabbed market share across the world and even made record profits in the latest quarter.

As my colleague Cheon Jong-woo and I wrote last week, Hyundai’s rise is making Japanese rivals nervous.

While Hyundai’s mounting success, founded on offering quality products at cheaper prices, has been in the cards for a while now, there are two new factors that worry the Japanese: a strong yen, coupled with the new government’s apparent indifference towards it, and South Korea’s progress in sealing free trade pacts.

from Route to Recovery:

Toyota plant workers sheltered from the downturn

HUNTSVILLE, Alabama – When the call came in on July 4, 2008 that Toyota was going halt production for three months, Wes Woods was getting ready to watch a fireworks display with his children.

“I was told that not only were we going to stop production, but that we had to come up with a three-month training plan for all our team members within two days,” said Woods, assistant general manager at the Toyota engine plant here.

The extreme slump in auto sales, which peaked at 17 million in 2005 but are expected to barely pass 10 million this year, forced domestic auto companies GM and Chrysler into government-led bankruptcy, and they shuttered plants, slashed their dealership networks and cut tens of thousands of jobs in order to receive government aid.

This Toyota plant, which began production in 2003 and makes big truck engines, did things differently.

“I don’t think anyone anywhere in the auto industry has ever been through anything like this,” said plant president Jim Bolte.

Although the plant shut down for three months to help cut inventory levels, no permanent workers were laid off, though temporary workers were let go and overtime was cut.

from Left field:

Tears as Toyota pull out of Formula One

Toyota team principal Tadashi Yamashina was in tears as the Japanese company announced it has withdrawn from Formula One with immediate effect.

Japan has deserted motorsport on mass during the economic crisis (Honda and Bridgestone to name just two).

Company president Akio Toyoda apologised for the team's failure to record a single race victory since joining F1 in 2002 despite an estimated annual budget of around $300 million.

"It was a very difficult but unavoidable decision," he told a news conference in Tokyo.

The departure opens the door for BMW Sauber's new Swiss owners to take their place on the grid.

PHOTO: Toyota Motorsport Chairman and Team Principal Tadashi Yamashina cries at a news conference at the company's headquarters in Tokyo November 4, 2009 REUTERS/Issei Kato

Brain-powered travel

It may not look like much, but this run of the mill electric wheelchair runs on brainpower – no hands required.

Part of a joint project between Japan’s Riken Brain Science Institute and Toyota, the chair reads subject’s brainwaves and converts them into movement.

While I found the technology itself quite impressive, there’s little doubt that the brain-reading headgear won’t be making fashion headlines anytime soon.

Until recently, the amount of processing time between brainwaves and the actual motion had been the major stumbling block of these type of technologies.

While increasing processing power is the driving factor, one additional method to speed up the response to get a clearer, more “noise free” reading on the brainwaves.

As I learned while watching the setup for the brain cap, this currently involves using “wet” electrodes, meaning putting a conductive goo between the sensor and the user’s scalp — not a technology you’d want to use after going to the hair salon.

Electric dreams

The Tokyo Motor Show later this month is expected to be a very understated event, with foreign carmaker participation almost nil and outlays by Japanese firms reflecting hard times in the industry.

But Electric Vehicles, or EVs, and hybrids will be on display in force, with Toyota, Honda and Nissan giving previews ahead of the late October show.

Nissan’s hybrid conundrum

If Carlos Ghosn were a politician, pundits might be accusing him of flip-flopping right about now.

After spending the last few years playing up the merits of zero-emission electric vehicles and knocking down the hybrid hype, the CEO of Nissan Motor appears to be back-pedalling, ever so slightly, on that stance.

The reason? Hybrids have become just too popular to ignore.

The trouble started when the Nikkei, Japan’s premier business daily, reported last month that Nissan was aiming to develop a hybrid system for small and mid-sized mass-market cars, with plans to roll one out in Japan in 2011.

If true, that would signal a change in course for Nissan, which has only announced plans so far to mount its in-house-developed hybrid system on high-end, rear-wheel-drive vehicles. The company declined to confirm or deny the report.

But investors took it as good news, sending Nissan’s shares up 2.5 percent that day. After all, Toyota’s Prius and Honda’s Insight hybrid cars alone accounted for 13 percent of domestic sales in July, excluding the unique 660cc minivehicle segment. As long as the government’s generous incentives last, hybrids appear to be a sure winner.

The problem is, Nissan is loath to publicise that it’s taking that road. That’s probably because, coming a full 13 to 14 years after Toyota launched its first Prius, it’s questionable how competitive Nissan’s hybrid vehicles could be. The company would rather keep the attention squarely focused on its electric car business, which it expects to lead the industry in the zero-emission field when sales of the first model, christened the Leaf, start next year.

Toyoda’s dilemma: To Race Or Not to Race

Today, reporters got their first chance to hear from Akio Toyoda since he became president of Toyota Motor — the company established by his grandfather 71 years ago.

Just two days on the job and much younger than the five executive vice presidents present with him at the news conference, Mr Toyoda, 53, was predictably cautious in what seemed a thoroughly scripted response to reporters’ questions. At times, he visibly flipped through the pages of what I could only surmise was a prepared Q&A cheat-sheet. Even the soundbites — “we’re setting sail in very stormy waters” — seemed unspontaneous.

But for a few minutes, it seemed, you could see the real Akio Toyoda come through.

It was when he was responding to a question about whether he would continue to race, as he did last month for the third straight year on the notoriously dangerous Nurburgring race track for the 24-hour endurance race.

After all, he’s now the chief executive of Japan’s biggest company and the world’s largest carmaker; getting behind a speed-machine would seem an obvious breach of safety considerations.

In the end, Mr Toyoda answered neither yes or no, but not before giving his audience a taste of his passion for racing — and cars.

Tigers, hungry bears at shareholder meetings

The annual shareholders meeting season is in full swing in Japan, and some executives have been dodging fastballs from disgruntled investors.

Quite a few managers are stepping up to the podium with a heavy feeling this year, as irate shareholders offer feelings about dividend cuts and plunging share prices.

The outgoing president of Toyota Motor was one top guy apologising; Japan’s No. 1 automaker expects a second straight year of record, multi-billion dollar losses this financial year.

Executives at Hankyu Hanshin Holdings were also forced to apologise at a meeting last week, but not for the Osaka-based railway’s own performance.

Local media said one incensed investor got up and lambasted the company for the hiring strategy of its hugely popular baseball team, the Hanshin Tigers.

“I don’t know what’s going on – you guys just keep hiring duds,” the man complained.