Toyota Dealers In China Face Tightening Of Market

 

Toyota dealer in Beijing

China has set six straight annual records for the most new vehicles bought by any country in the 150-year history of the automobile. And yet, a troubling trend has emerged among the dealers moving all that metal — most are just spinning their wheels.

This should cause Toyota Motors here in Nagoya to take pause and consider its marketing and dealer contracting in China.  Right now the Toyota dealers are barely profitable.  This year looks bleak for dealers excluding Chinese manufacturing dealers as China sets greater regulations and higher taxes for non-Chinese auto dealers.

 

Three in four dealers were either unprofitable last year or just breaking even, according to the China Automobile Dealers Association. With little sign of improvement in the economy and carmakers pushing too much inventory onto their ever-growing networks of retailers, the situation may worsen this year, said Zhu Kongyuan, secretary general of the China Auto Dealers Chamber of Commerce.

“It’s getting more and more difficult for dealers to stay in business, as new car sales are not making much profit anymore with all the competition on price,” said Zhou Jincheng, an analyst at researcher Fourin Inc. in Nagoya, Japan. “Under this situation, dealerships won’t stay as they are. They’ll be reorganized, and some may be integrated.”

China’s auto industry operates in a Gold Rush-like atmosphere. Manufacturers have raced to fill their lineups and expand dealer networks to stake their claim of a market that’s grown six-fold in the last decade.

This week, General Motors Co., Volkswagen AG and Nissan Motor Co. are among the exhibitors parking 1,179 vehicles on 30 soccer-fields-worth of floor space in Beijing for the city’s biennial motor show. Those three carmakers have nearly as many dealers as there are McDonald’s, KFC and Starbucks stores in China, according to analysts at Sanford C. Bernstein & Co.

With more than 1,600 exhibitors at the auto show and dealers struggling, China may seem ripe for consolidation both at the dealer and manufacturer level. Manufacturers have done only 10 acquisitions valued at more than $1 billion in the last decade, according to data compiled by Bloomberg. The first such deal among retailers was China Grand Automotive Service Co.’s $1.1 billion purchase of a stake in BMW AG retailer Baoxin Auto Group Ltd., announced in December.

Conditions are in place for similar deals, including for U.S. auto dealer groups like AutoNation Inc. and Penske Automotive Group Inc. to enter China, said Michael Dunne, a Hong Kong-based strategy and investment adviser at Dunne Automotive Ltd.

While China’s been setting annual sales records, deliveries have come up short of the state-backed China Association of Automobile Manufacturers’ initial growth forecasts in four of the last five years. Last year’s 4.7 percent expansion was the smallest since 2012.

“The slowing market means that several dealers are genuinely interested in exiting the business for the first time,” said Dunne, who started visiting Chinese dealerships in the 1980s.

“They’ve got to shift in a hurry to areas that they’re not familiar with,” including used-car sales, parts and service repairs and financing. “These are areas where big, American dealership groups really excel.”

New entrants would be able to count on Beijing providing a boost if car sales wane, with the government keen to transition the economy toward greater reliance on the consumer than on investment. After deliveries fell in five consecutive months last year, the central government stepped in with a tax cut on purchases of vehicles with smaller engines that took effect Oct. 1.

While the tax cut has succeeded in buoying sales, it’s fallen short of helping dealers clear their crowded lots. For the last seven months, the China dealers association’s Vehicle Inventory Alert Index has registered above the 50 percent level that indicates low market demand and high inventories.

Nagoya Business Weekly

Translated from Japanese by Dallas Brincrest and Charles Gannon

Nagoya Court To Hear KEPCO's Takahama Case

Takahama Nuclear Plant Operated By KEPCO

The Nagoya District Court has agreed to hear its first case against restart of the Takahama Nuclear Power Plant operated by Kansai Electric Power Company (KEPCO). 

Plaintiffs seeking to halt the restart of two KEPCO reactors now more than 40 years old filed a lawsuit in the Nagoya District Court on Saturday to challenge the government-appointed Nuclear Regulation Authority’s restart review process, warning that running the units for another two decades would be dangerous. 

Kepco’s Takahama No. 1 and 2 reactors in Fukui Prefecture began operation in 1974 and 1975, respectively, and the original plan was to decommission them after 40 years.

However, the government has authorized a one-time, maximum two-decade extension if the old reactors pass new safety tests.

The NRA essentially cleared the two Takahama reactors in February, but will conduct other specialized checks to determine their condition before deciding whether or not to officially grant approval for an extension.

“In a serious accident at the Takahama reactors, there is a danger of radiation damage from the effects of a westerly wind,” said lawyer Sakae Kitamura, who is representing the plaintiffs, at Saturday’s news conference in Nagoya.

Kepco is racing against time to finish the safety review and secure approval before the July 7 regulatory deadline. If Kepco misses the deadline, the utility will be forced to permanently shut both reactors.

The major issues the plaintiffs are contesting include concerns about the condition of the reactors’ pressure vessels, and questions about whether the seismic risks for the old reactors have been fully considered.

Jiji Press

Nagoya Woman Sets Fiancee On Fire

Fire Crew at Murder Scene

Aichi Prefectural Police have arrested a 25-year-old woman after she allegedly killed her finacee by setting him ablaze inside the residence they shared, reports the Chunichi Newspaper.

At approximately 9:00 p.m. Friday, Maya Hisajima doused the clothes of Junichi Hayakawa, 52, with lighter fuel and set him on fire with a lighter after he went to sleep in a room of the third-floor apartment, located in Moriyama Ward.

Hayakawa was confirmed dead at a nearby hospital about one hour later.  Third degree burns covered over half his body.

Hisajima, who was charged with murder, admits to the allegations. “We are in a relationship and got in a fight.  He spent too much money on his interests and not on me.  I think he was cheating on me.” the suspect is quoted by police.

After igniting her boyfriend, Hisajima contacted a nearby police box, saying that she may have killed someone and needed an ambulance and police.

A fire brigade arriving at the scene found Hayakawa on his bed badly burned and unresponsive. 

Chunichi and other sources.

2 Iranians Idicted For Murder

 

Aichi Police Taking Suspects To Court

Prosecutors on Thursday indicted two Iranian men on charges of killing a compatriot last December in Nagoya, in an attack apparently related to illegal drug trafficking.

 

The two men, aged Mohammad Salmiz (43) and Hazim Kafuz (32), fatally attacked Anami Shirmard Milad, 27, in conspiracy with other assailants, according to the indictment.

The prosecutors and police declined to disclose the names of the two arrested men, while the indictment said the names of the other assailants were not known.

According to the indictment, the attackers in one car stopped the victim, who was driving another car, on a road in the early hours of Dec. 20 and stabbed him in the arms and legs.

Prosecutors charged the two men with injury resulting in death, not murder, saying murderous intent was not clear from where the victim was stabbed.

The men, who were arrested on suspicion of murder in February, have denied the allegations.

Murder-Suicide In Nakamura Ward

Local Coverage On TV

The bodies of a man and a woman were found in an apartment in Nagoya in an apparent murder-suicide, police said Friday.  The location is in Nakamura Ward, Nagoya Shi.

The body of a woman identified as Tomoka Matsuyama, 27, a restaurant employee, was found in the apartment on Thursday night, police reported. Police said she had strangulation marks on her neck.

The body of her boyfriend, a man in his 20s who worked at the same restaurant, was found hanging from the balcony railing. Police said they believe the man killed Matsuyama and then hanged himself.

The bodies were discovered at around 6:35 p.m. after a colleague of the couple came looking for them when they didn’t show up for work. The apartment belongs to the company that operates the restaurant.  

Charles Gannon translation from Chunichi

Ceantrair Airport Island To Get Comic-con Convention Center

Chubu Centrair International Airport

The 2020 Olympics has thrown the future of Comic Market (or Comiket), Japan's biggest dōjinshi convention, into doubt. Tokyo Big Sight and Makuhari Messe, Tokyo's biggest convention centers, have been earmarked to hold Olympics events. There is a scarcity of other suitable events spaces in the Tokyo area. A Comiket questionnaire recently asked dōjin circles whether they would attend a Comiket held in Osaka or Nagoya. 

On February 3, Aichi Prefecture (where Nagoya is located) announced that it would build a convention center on the artificial island in Tokoname where Nagoya's airport, Chūbu Centrair International Airport, is located. The building will take up 60,000 m² (645,835 square feet) and is scheduled to open in the fall of 2019. In a tweet, Aichi's governor, Hideaki Ohmura, wrote that the building will provide space for events displaced by the Olympics and that the prefecture would provide 360 million yen ($3.06 million) this year for its initial construction. The total cost of construction, including neighboring facilities, is estimated at 35 billion yen ($298 million). 

Meanwhile, Nagoya has already been planning to build a convention center within the city itself — specifically, at its port, and 2 km (1.24 miles) away from another convention center, Portmesse Nagoya. That event space would cover 50,000 m², (538,196 square feet) compared to Portmesse Nagoya's 33,000 m² (355,209 square feet). It is unclear how Aichi Prefecture's plan will affect this project.

Comiket has always been held in the Tokyo area since its founding in 1975 and has used Tokyo Big Sight as its event space since that building opened in 1996. Tokyo Big Sight boasts roughly 80,000 m² (861,113 square feet) of exhibition space, while Makuhari Messe offers 72,000 m² (775,002 square feet). Intex Osaka, with its roughly 70,000 m² (753,474 square feet) of exhibition space, has also been suggested as an alternative convention center for Comiket. 

J. Stimson, ANN

Classmates Knew About Suicide Victim's Bullying

Boy's father talks about son's bullying

A boy who killed himself by jumping in front of a subway train in Nagoya was being bullied at school — and at least 20 students knew about it.

A survey by the Nagoya city education board showed Friday that the pupils at a municipal junior high school were witnesses to the 12-year-old’s ordeal, and some admitted that he had asked them for help.

Meanwhile, the boy’s family have expressed their grief.

“I don’t want to single out particular bullies, but I hope efforts will be focused on investigating why this happened so as to prevent someone else from becoming a victim,” the boy’s father told a news conference on Thursday.

The boy died last Sunday when he was hit by a train after jumping from a platform at a subway station in Nagoya. He left a note at home saying he had killed himself because he could no longer stand being bullied.

The emergency questionnaire was conducted at the school where the boy was enrolled as a first-grader. Nine of the 20 students saw bullying taking place during an extracurricular club the student took part in.

In the anonymous survey conducted on Wednesday, 494 of 528 students at the school gave replies. Other than the direct witnesses, three said they heard about the bullying or that the victim had asked them for advice. Fifty-seven replied that they heard about it from people other than the student.

Of the witnesses, 13 said they saw the student being ridiculed or slandered, and six said he was ostracized or ignored.

A separate interview-based survey conducted by the education board with members of the extracurricular club revealed that the student had consulted a fellow club member and reported feeling he was at the end of his tether, it was learned Thursday.

The junior high school was unaware of the bullying, according to the education board. The board is expected to conduct detailed investigations.

Jiji Press

Nagoya Reporter Damages Self Driving Car

Nissan Autonomous Drive

 A TV reporter who was in the driver’s seat of a self-driving car caused a traffic accident during a test run under a university project last month in Nagoya, according to sources.

 

The experiment on self-driving technology was conducted by Nagoya University Oct. 22 on a public road in Nagoya. In the driver’s seat was a reporter from Nagoya Broadcasting Network, the sources said.

Although the test run had been approved by Aichi prefectural authorities in advance, the application showed a researcher, not a TV reporter, would be in the driver’s seat, the sources said.

The Nagoya TV reporter caused a flat tire soon after the car was set in the self-driving mode and hit a roadside block. It caused damage to the car but no one was injured.

The prefectural government has urged Nagoya University to ensure the safety of such experiments because they are conducted on public roads.

Nagoya TV meanwhile said the reporter has a driver’s license and was briefed about how to operate the car before the test run.

The car in the experiment was equipped with various sensors for self-driving but required the driver’s handling to avoid obstacles.

Kyodo

Container Traffic Down 4.2% In Nagoya

Port of Nagoya

 All but one of Japan’s five biggest ports saw their international container traffic shrink in the first half of this year amid growing economic uncertainty at home and abroad.

The situation is likely to continue an economic slowdown in China, Japan’s largest trading partner, and other emerging markets takes its toll on exports. Imports, which primarily come from China, are also sluggish due to a delayed recovery in domestic consumer spending from a sales tax hike in 2014.

Many economists say that the Japanese economy, as measured by gross domestic product, may have slipped into a technical recession in the July-September period, contracting for the second consecutive quarter.

Of the five-largest Japanese ports, Tokyo, Yokohama, Nagoya and Osaka all recorded drops in their international container traffic in the first half of this year, but Kobe managed to post moderate growth.

Overall foreign trade container volume declines are as follows: Osaka, down 12 percent at 953,889; Tokyo, down 8 percent, at 2 million TEUs; Nagoya, down 4.2 percent at 1.2 million TEUs and Yokohama, down 2.8 percent at 1.3 million TEUs.

Exports from the four ports were down: 12 percent at Osaka to 432,726 TEUs; 9 percent at Tokyo to 927,295 TEUs; 4.5 percent at Nagoya to 632,570 and 4.1 percent at Yokohama to 669,682 TEUs.

Imports at the four ports were down: 12 percent at Osaka to 521,163 TEUs; 8 percent at Tokyo to 1 million TEUs; 4 percent at Nagoya to 585,489 TEUs and 1 percent at Yokohama to 598,506 TEUs.

Foreign trade containers handled by Kobe climbed 3.5 percent in the January-June period from the same six-month period of 2014, totaling 1.061 million TEUs. Exports were up 3.3 percent at 565,136 TEUs, while imports were up 3.7 percent at 496,179 TEUs.

Hisane Masaki

Jet Star To Add Nagoya - Taipei Route

Jetstar Japan, the largest low-cost air carrier (LCC) in Japan, said Wednesday that it will launch direct flights from the Japanese cities of Tokyo, Osaka and Nagoya to Taipei from Nov. 27 to tap Taiwan's growing markets.

Jetstar Japan will introduce the Taiwan Taoyuan International Airport-Tokyo Narita route Nov. 28, the Osaka route Dec. 11 and the Nagoya route Dec. 13.

The budget carrier said it will become the first LCC to operate flights between Nagoya and Taiwan.

Jetstar will initially operate three services per weekon each route, increasing to daily flights from Dec. 24, using its fleet of Airbus A320 aircraft.

Jetstar Japan Chief Executive Officer Gerry Turner said in an earlier press release that the carrier expects the new services to be popular with leisure travelers.

"Taiwan is a very popular destination for Japanese travelers and Taiwan is Japan's third-largest source of tourists. We expect these services to increase the market," he said.

Nagoya University Leads The Way In New Technology

To cope with the accelerated aging of the nation’s population, Nagoya University is working to develop futuristic vehicles.

At the Institute of Innovation for Future Society, which was established last year at the university in Chikusa Ward, the school’s researchers are collaborating with engineers from private companies to create new products.

Based in Aichi Prefecture, which has long been a driving force of Japan’s manufacturing industry, they hope to once again take on the challenge of creating new products.

A prototype Smartchair, a computer-controlled chair jointly developed by the university and Panasonic Corp., was unveiled in August at a trade show hosted by the government-funded Japan Science and Technology Agency (JST).

“You seem to be slightly lacking concentration today. Please be careful when you walk.”

As an electronic voice comes from a machine attached to the chair, itslowly tilts forward to make it easier for the user to stand up.

The developers say the concept of the Smartchair is to support users inconspicuously while constantly monitoring them. Ultra-sensitive sensors are embedded in the back and armrest that measure the user’s brain waves, pulse and breathing. It can also detect changes in blood flow from the user’s fingertips and determine the level of tiredness by calculating the concentration of oxygen in the blood.

Nagoya University researchers developed the sensor and Panasonic engineers are working to apply the technology into a viable product. “We believe that 10 years from now, people will be living in smart houses that make residents healthier,” said Eiji Ohno, a Panasonic official who is working at Nagoya University as a specially appointed professor.

The university’s National Innovation Complex, where the institute is based, also houses research labs of other manufacturers, including Toyota Motor Corp. and Toshiba Corp.

Supported by the central government and JST, projects pursued at the complex are aimed at developing new necessary future technology, as well as linking the university’s technologies and skills with private companies to create new products.

The projects include improved automated driving technology, which is already partially capable of highway driving, so cars can detect dangers and intervene in driving on regular roads.

The project’s goal is to maintain, or even increase, the chances for elderly people to drive, researchers say.

While it is technologically possible to predict dangers based on the position of pedestrians, for example, researchers are afraid that any sudden braking or swerving via automatic driving might confuse drivers.

To determine the best way for robots to provide support, the institute is creating a database of the behavioral characteristics of elderly drivers.

“This kind of research is hard for one company to conduct only by itself, because unlike projects such as improving engine specs, we need to take the social system into consideration as well,” said visiting professor and project leader from Toyota Kenji Esaki.

“Until now, (the) business-academia partnership has typically been conducted between one academic researcher and a company, but what we have realized here is organizational collaboration,” said professor Shigeaki Zaima, director of the institute.

The university has sent some 100 staffers to the institute to deal with intellectual property issues and other tasks, with the intention of turning their research into marketable products.

The university hopes to benefit from the partnerships also by strengthening its position as the center of research in automobile-related technology.

“I hope our university becomes the leading research center in the world (in this field),” said university President Seiichi Matsuo.

Chunichi