Honda to Nissan Bet Small Is Profitable With Minicar Push: Cars

Honda Motor Co.'s S660 concept sports car in Tokyo, Japan, on Oct. 16, 2013. Photographer: Kiyoshi Ota/Bloomberg

By Ma Jie, Masatsugu Horie and Anna Mukai of www.businessweek.com

Japan’s automakers are betting that small will be the next big thing. 

At the Tokyo Motor Show opening this week, Honda Motor Co. will unveil the two-seat S660 convertible, its first mini sports car since 1996. Daihatsu Motor Co. has a rival model with panels that can be changed like an iPhone cover. More than a third of the show’s debuts will be mini vehicles, up from about 14 percent in 2011, data compiled by Bloomberg show.

Manufacturers are jazzing up the “kei” car -- as they’re known in Japanese -- to escape their image as boxy utility vehicles driven by country bumpkins and older people, and attract new buyers into the biggest bright spot for the world’s No. 3 car market.

“People who drove minicars used to be made fun of,” said Takeshi Miyao, a Tokyo-based auto analyst at Carnorama Japan. “Now, even those who drive sedans are looking.”

Distinguished by their yellow number plates, kei cars were originally created as a cheap means of transportation as the country industrialized after World War II. Typical minicars today are narrow and boxy, with an engine no bigger than 0.66 liters. About two-thirds of drivers are women, and a third are older than 60, according to the Japan Mini Vehicle Association.

While small cars have proved popular in other countries -- think Britain’s Hillman Imp or Italy’s Fiat 500 -- they don’t come close to Japan, where mini vehicles accounted for 39 percent of new cars sold in the first 10 months of this year. Researcher IHS Automotive says it sees no sign of the market share changing.

Standing Out

Kei car sales have gained 3.4 percent this year, compared with the 6.8 percent drop for larger passenger vehicles, industry association data show.

Automakers will be competing for customers like office worker Ritsuko Yamasaki, who owns a 1.2 million-yen ($12,000) Daihatsu Tanto but wants a car that stands out from those driven by her neighbors in Okayama prefecture, 730 kilometers (450 miles) southwest of Tokyo.

“Minicars now are all alike, and don’t look cool or cute,” said Yamasaki, 50, who bought her van-type Tanto two years ago. “My next minicar should be roomy, look different from a delivery vehicle, and be something we can be proud of.”

Suzuki Motor Corp.’s offering is a curvy mini crossover that looks like an SUV. Nissan Motor Co. will display the Dayz Roox wagon, the second minicar developed with Mitsubishi Motors Corp. after its debut into the market earlier this year.

Tax Break

To be sure, demand may suffer if the government raises the levy on minicars as part of reforms tied to Prime Minister Shinzo Abe’s decision to raise the national sales tax next year.

Owners of minicars now pay 7,200 yen in tax a year, compared with 29,500 yen to 111,000 yen for cars with larger engines, according to the transport ministry.

Any increase will hurt lower-income families and small businesses in rural areas, where minicars are the main mode of transport, the mini vehicle association and Japan Automobile Manufacturers Association said in a joint briefing on Nov. 15.

Automakers will debut a total of 157 models at this year’s show, with 76 due for global release and 81 for the domestic market. That will make it the biggest display of new models since 2007, before the onset of the global financial crisis and natural disasters in Japan, according to the organizers.

“At this Tokyo Motor Show, I want everyone to get a vision of Japan’s future,” Toyota Motor Corp. President Akio Toyoda, who chairs the organizing committee, said this month.

Futurology

The future, as envisioned by Toyota, may take the form of a chameleon-like vehicle that changes color according to the driver’s mood and suggests destinations based on facial expressions. The world’s largest automaker will display a concept car that uses facial and voice-recognition technology derived from its research into humanoid robots.

Toyota’s luxury Lexus division will also unveil the new-generation RC Coupe and a compact SUV concept.
Nissan, Japan’s No. 2 carmaker, will show an electric-car concept, called the “BladeGlider,” that offers a sense of glider-like piloting with a swept-back wing design and driver’s seat in the center of the vehicle.

Foreign automakers will display a total of 109 models, led by Volkswagen AG, the biggest overseas carmaker by sales in Japan. Registrations of imported vehicles are up 9.7 percent this year, the Japan Automobile Importers Association says. 

VW will display 17 models, including the all-electric compacts e-up! and e-Golf hatchback. Daimler AG’s Mercedes-Benz, the second-biggest foreign brand in Japan, will show two models for the first time in Tokyo, including a special edition of the AMG super sports car.

Tesla Motors Inc (TSLA:US)., the electric carmaker founded by billionaire Elon Musk, will be the lone U.S. carmaker at the show. The Palo Alto, California-based company opened its second dealership in Japan this year and will exhibit its Model S.

The Tokyo Motor show will be open to the public from November 23 to December 1 at Tokyo’s Big Sight in Odaiba.

Source;
http://www.businessweek.com/news/2013-11-18/honda-to-nissan-bet-small-is-profitable-with-minicar-push-cars#p1

Honda gears up for F1 return as engine supplier

Honda Motor Co. is looking to return to Formula One motor racing as an engine supplier around 2015, a source said Monday.

Honda plans to supply new engines with small displacements, possibly teaming up with its former partner McLaren of Britain, the source said.

Honda withdrew from the F1 grid after 2008 in light of financial difficulties caused by the global financial crisis. The annual costs of joining the race are believed to have topped ¥40 billion at the time.

Honda will carefully assess the financial impact of returning to the sport before making a final decision, the sources said.

Honda, which first joined F1 in 1964, joined for a second stint from 1983 to 1992 and a third between 2000 and 2008.

During its second stint, Honda collected 69 victories under such talented drivers as Ayrton Senna da Silva, triggering an F1 boom in Japan.

The 2015 comeback would be the company’s fourth.

A comeback would likely allow Honda to use F1 technology in producing mass-market vehicles, since the race is set to make a switch in engine specifications to 1,600cc turbocharged V6s from 2,400cc V8s in 2014.

Honda plans to launch several new models around 2015.

Toyota Motor Corp. pulled out of F1 in 2009, leaving the sport devoid of Japanese automakers.

Earlier, vehicle makers Yamaha Motor Co. and Fuji Heavy Industries Ltd. had also provided engines for F1 racing teams.

Source;
http://www.japantimes.co.jp/news/2013/03/18/business/honda-gears-up-for-f1-return-as-engine-supplier/#.UUcfRjeReNo