Robust Japanese Car Market... "Need to Target with Kei Electric Vehicles"

Report Presentation Related to Korea Automotive Technology Institute

[Asia Economy Reporter Kiho Sung] To penetrate the Japanese market, where the barrier for imported cars is high, it was advised to focus on economical kei electric vehicles.

On the 20th, the Korea Automotive Technology Institute released a report titled 'Characteristics of the Japanese Domestic Automobile Market' introducing this strategy.

Lead researcher Hojung Lee explained in the report that Japan's domestic automobile market has been in continuous decline since peaking in the 1990s; however, new car sales last year reached 4.45 million units, maintaining the world's third-largest scale.

The causes of decreased automobile demand include population decline and aging, reduced disposable income, and increased use of public transportation. From the supplier side, an export-oriented strategy is suppressing domestic sales.

Particularly, the Japanese market, often called the graveyard of imported cars, has a domestic brand sales share of 93.4%, led by Toyota, the highest among major countries worldwide. Imported car sales are concentrated on German brands such as Daimler, BMW, and Volkswagen, while the presence of other European, American, and Korean brands is minimal.

Moreover, most popular models within Japan lack global compatibility. The researcher pointed out that while the global sales share of sport utility vehicles (SUVs) is increasing, last year kei cars accounted for 37.2% of new car sales in the Japanese market, which supports this observation.

He stated, "Due to these unique characteristics, globally popular models rarely succeed in the Japanese domestic market, and conversely, popular models in Japan are seldom sold in major automobile markets. This is because Japanese consumers prioritize economy due to maintenance cost burdens when purchasing cars."

He further revealed that Japanese consumers show more interest in safety-related options such as collision mitigation brakes rather than expensive advanced features. The report noted that while the characteristics of the Japanese domestic market are unlikely to change rapidly, the electric vehicle market could have potential if approached with an emphasis on economy.

If the total cost of ownership (TCO) of electric vehicles becomes cheaper than internal combustion engine and hybrid vehicles, infrastructure expansion and regulatory improvements aligned with the popularization of electric vehicles could stimulate market changes.

The report stated, "The kei electric vehicles 'Sakura' and 'eK X EV,' launched respectively by Nissan and Mitsubishi, are expected to be the starting point for electric vehicles in the Japanese market."

This content was produced with the assistance of AI translation services.