Remember the original Perodua Kancil and Perodua Kenari that graced our roads? These cars are products from Daihatsu’s Kei-cars; originally introduced only in the Japanese market and typically powered by either a normally aspirated or turbocharged 660cc engine. The Kei-cars, identified by the unique yellow license plates (pic above), provided cheap and cheerful motoring to all walks of life in Japan, either for personal transportation via small micro hatchbacks or carrying items via micro trucks. Now after 60 years, the glory days of Kei-cars are in jeopardy.
In April, the Japanese government introduced measures that hit the Kei-car owners, including higher sales tax, higher gasoline tax and a 50% increase of Kei-car tax. Japan’s unique tax breaks and restrictions for Kei-cars to protect domestic automakers from foreign competition has caused uneasiness during trade talks between Japan and other nations. In other words, the government no longer protects domestic manufacturers of such cars like Suzuki, Daihatsu, Honda, Toyota and Nissan.
To make matters worse, these cars are not manufactured for export, due to its small size that evidently fails the strict safety standards in Europe and the United States. Selling Kei-Cars only domestically means limited economies of scale and manufacturers can’t justify spending more for research and development on such cars. In an era where the automotive industry is all about net profit, it is a matter of time before Japanese car manufacturers abandon Kei-cars – such a result will impact Suzuki and Daihatsu heavily as these two are the kings of small cars.
“For years, the kei was the people’s car in Japan. But now its role is over. The distinction no longer makes sense” said Mitsuhisa Yokoyama, an analyst at SC-ABeam Automotive Consulting, an advisory firm based in Tokyo.
With the raising tax, rising fuel cost and escalating inflation, this will surely hit the working class Japanese. It looks like the classic Kei-car such as the Daihatsu Mira, Suzuki Wagon-R, Suzuki Cappuccino and Honda Beat will soon become relics of the past.
[Source: New York Times, Image Source: Wikipedia]
