JPRS ID: 10344 JAPAN REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000500030053-5
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 63
• Document Creation Date: November 1, 2016
• Sequence Number: 53
• Content Type: REPORTS

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JPRS L/ 10344
19 February 1982
Ja an Re ort
p p
' CFOUO 12/82)
_ Fg~$ FOREIGN BROADCAST INFORIVIATION SERVICE
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FnR (1FF1C1;11. 1 ~tiH: OM.l'
JYRS L/10344
19 February 1982
JAPAN REPORT
cFOUO i2/sa)
CONTENTS
.
ECONOMIC
Automobiles--Groping for Coexistence
(Shimokawa Koichi; JAPAN QUARTERLY, Oct-Dec 81) 1
MITI Plans To Keep Automobile Exports to U.S, at 1.68 Mi~.lion
(NIKKAN KOGYO SHIMBiTV, 20 Jan 82) 11
Dissatisfaction Expressed Over Expansion of Export of
Automobile Parts
- (NIKKEI SANGYO SHIt~BUN, 21 Jan 82) 13
SCIENCE AND TECHNOLOGY
MITI Initiated Full Investigation on Use of 'Stirling Engine'
~TECHNOCRAT, Oct S~) 15
Super Alloys for rluclear Steelmaking
(TECY.NOCRAT, Oct E1) 21
Tndustry in VLSI Production War Reported
(NIKKEI SANGYO SHIMBUN, various dates) 24
Plutonium Extracted To Be I1sed for T~WR Nuclear.� Power Generation
(AlAINICHI SHIMRUN, 31 Dec 81) 37
'DF.NKI SHIMBiiN' Discusses Strengthening Nuclear Fuel Cycle
(UENKT SHIM1iiJN, 9 Jan 82) 39
- Suzuki Di.scussed Flectronics Revolution, Economic Changes
(Yamamoto interview; NIHON KEIZA SHIMBUN, 11 Jan 82) 41
General Conditic,ns of Japan's Technology Trade
(DIAMOND'S INDiJSTRIA, Jan 82) 47
- a - [III - ASIA - 111 FOUO]
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_ Uranium Enrichment Shelved Pending Solution of ExPenae-Sharing
~DF.NKI SHIMRUN, 16 Jan 82) 52
Canstitutional Improvement, Reorganization Efforts Reporred
(SANKEI, 19 Jan 82) 55
Japan-Australia Negotiations To Revise Nuclear Energy Agreement
(DENKI SIMBUN, 20 Jan 82) 58
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ECONOMIC
AUTOMOBILES--GROPING FOR COEXISTENCE
Tokyo JAPAN QUARTERLY in English Vol 28 No 4, Oct-Dec 81 Pp 518-527
[Article by Shimokawa KoichiJ
[Text]
~ Introduction began to gather steam, triggering a wave of
motorization throughout the country which,
AKEN together, the auto industries of in turn, boosted the domestic demand for
T the United States, Europe and Japan automobiles. Similarly, the sharp increase
account for more thaa 80 percent of in U.S. demand for importeci subcompacts
the world's auto production. In particular, (1600cc-2000cc pision displacement), espe-
the Japanese auto industry has strengthened cially those made in Japan, which occuned in
its competitive position markedly in recent the wake of the first oil crisis ~f 197~, coming
years, snd in terms of production volume it as it did when Japan's domestic autq demand
has forged ahead of the other two production was in the doldrum.s, helped the Japanese
centers. In 1980, Japan produced 11.04 automakers sustain tae forward momentum
million units (including trucks and bus~s). of their producdon.
This represents an incre3ibly rapid 5.9-fold What contributed most to turning the over-
increase in 15 years from the 1.87 million seas market conditions favorably to 7apanese
units groduced in 1965. More than anything cars, however, were th~ steep increases in fuel
else~ this increase is atvibutable to the up-ta prices. As OPEC raised its crude prices,
date production facilities that the Japanese overseas demand, notably in the U.S. market,
industry has installed and which have for fuel-efficient cars grew rapidly. This
translated into high tabor productivity, high proved a gceat boon to ~~e Japanese auto
product quality and good maintenanco industry, which had long been concentrating
service-advantages derived from having on the production of such subcompacts. Fol-
- started later than the other compcting lowing the gasoline panic that erupted in
markets. t979, U.S. consumer preference shifted ab-
Also bolstering Japan's competitive posi- ruptly in favor of subcompacts. So abrupt
- tion have been changes in the domesuc as was the shift, in fact, thac LT.S. automakers
well as ovcrseas markets which have taken which had traditionally concentrated on the
place to the advantage of the Japanese auto manufacture of full-size cars had to cut
industry. For instance, from around 1960, productio? drastically because of lack of
when Japanese automakers geared themselves demand. By contrast, their Japanese coun-
for mass production, the Japanese economy terparts busied themselves expanding their
. 1
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production to meet thc growing erport morc than 10 percent ut'tlic nation's gainfully
demand. omploycd ~vorkers arc accuunted for by the
It is true that good luck-favorable auto industry.
changes in overseas markets-had a hand in Of the 1Z.04 million units Japan produced
accelerating the growth of the Japanese auto in 1980, light four-wheelers accounted for 1.11
industry. But much more than sheer luck, million units. Almost all of the passenger
the major reason for its remarkable growth cars were subcompacts; compa~t cars ac-
has been its superior competitiveness-an cou~ted for only 10 percent, and eight-
overall strength that combines the know-how cylinder engine vehicles less than 1 percent.
of its su~:portive industries (crude materials, Trucks axounted for 3.91 million units and
parts and components and machinery), buses 91,000 units.
improved productivity and dogged marketing Overall, passeager cars accounted for 63.7
efforts. percent, compared with 79.6 percent in
In the foltowing pages, I would like to the Uniied States and 90.8 percent in West
survey the cunent situation and charac- Germany. The lower percentage of pas-
teristics of the Japanese auto industry, senger car production in Japan is attributabie
- review the history of its development, examine to the fact that commercial vehicles of the
the factors which helped it attain a competitive van type are counted as trucks and also
edge in the world's auto mar...;ts (particularly because the percentage of truck production
those which boosted its productivity), and has traditionally been high in this country
finally discuss its outlook in light uf the (in 1965, for instance, r.rucks accounted for
competition it faces in the wotld market for more than 60 percent of the nation's total
subcompacts, as dramatized by the trade auto production).
frictions which Japanese auto eYports have The heavy coocentration of production on
caused with the United States and Europe, small cars and trucks is a corollary of the
country's physical conditions (narrow streets
-inherited from the vaditional city layout
Current Situation -and poor roads) and the high domestic
gasoline tax (inevitable for a country which
Along with steel and electrical machiuery, relies almost entirely-99 percent-on im-
automobiles are a leading industry in Japan, ported oil).
underpinning the development of the nation's In 1976, export sales of Japanese autos
economy. In 1979, Japanese auto production leaped ahead of steel and since theu have
- (including automotive parts and components become the largest earner of export dollars.
and car bodies) amounted to ~f18,307.3 bil- Automobiles account for 21.9 percent of the
lion, more than 10 percent of the nation's nation's total exports by value, and their
industrial production. This percentage would export sales generate enough dollar receipts
- be even larger if auto-related services (auto to pay one-half the nation's oil bills. In
repairs, marketing and transport of autos for 1980, Japan ezported 5.96 million units of
iocal distribution) were included. cars an~ trucks, or 54 percent of its annua.l
In additioa, the auto industry uses 16.3 auto production of 11.04 million units. ; his
- percent of the nation's production of ordinary represents a 2.5-fold increase in 10 years in
- stecl, 20 percent of special steel, 78.9 percent terms of percentage of exports over the 20
of aluminum castings, 71.8 percent of percent it exported in I970. The ratio of
aluminum die-castings, 49.3 percent of rubber exports is the highest in the case of passenge~r
goods, 20 percent of paints and 34.6 percont cars (66.2 percent), followed by t,rucks
of glass. In the area of employment, also, (32.7 petcent) and. ouses (I.1 percent).
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~
In terms of destinations, the L'nited States from one area to another-low (35 percent to
is the largest importer of Japanese cars 36 percent) in large urban centers (such as
- (40.3 peccent), foilowed by Europe (20.6 Tokyo, Osaka and Yokohoma) where the
percent), Suutheast Asia (9.7 percent), :he ra~id transit systems are well-developed, and
~ Middle East (9.1 perceat) and Latin America high (60 percent to G9 percent) in rural areas
(6.4 percent). (such as Tahoku, Shikoku, Kbshin'etsu,
By contrast, Japan imported a total of Tokai and Hokuriku).
44,871 units of cars (80 percent of which Characteristic of the recent demand for
were from West Germany and the United cars has been the predominance of re~lace-
States), a mere 1.1 percent of the cars reg- ment demand: 77 percer.t of new cars bought
istered in Japan. This low level of imports were for replacement ~urposes, while 18.6
has become a source of recurring trade fric- percent represented original purchases. Re-
tion with the United S:ates and Europe. flecting this structural chanbe in car owner-
Although the Japanese government has been ship, sales of used cars have increased in
trying to encourage auto imports by simplify- recent years to a level matching or even
ing import procedures and by aoolishing surpassiog the number of new cars sold
import duties ~n foreign cars, no appreciable (104.3 percent in 1980).
increase has taken place yet, largely due to In terms of size, automobiles with a piston
- the stronger yen and the lack oi price com- displacement of I,GOOcc to 1,600cc (popular
petitiveness of thest imported cars. cars) and those with a piston displacement of
- In 1980, a total of 5.01 million units of :,60rlcc to 2,OOOcc (subcom.pacts) accounted
automotive vehicles (including light four- for 41.3 per.cent and 41.9 percent respectively,
wheelers) were ne~vly registered, down 2.7 or for a total ef more than 80 perceat;
percent from t6e previous year. This re- compacts (those with a piston displacement
presents the first deciine in four years. Only of 2,OOOce or more) accounted for 8.5
light four-wheelcrs ;egistered an increase percent, light cars (those with a~iston dis-
(18.3 percent), thanks to the growth in placement of SSOcc) 6.l percent and sport
demand for commer~ial vehicles; subcom- cars and imports accounted for the remaining
pacts and trucks, on tlie othcr hand, recorded 2.2 perc:.n~.
a 6.9 percent decrease. This de~rease reflects The Japanese auto industry distinguishes
a wcakened consumer confidence brought itself from those of o~~er countries in many
about by a decline in ~eat iccome, the ways. The most outstanding difference is
worldwide ecooo~ic slowdown and the :he multiplicity of automakers. While
]ooming uncertainty of o~l supply accentuated therc are only two or three-iour at the most
by the continuing war betwecn Iran and -automakers in Western couniries, ttsere
Iraq. ~re no less than 11 makers vying for a
_ Howcver, the fact that the nation has share of the market in Japan, eacti trying to
managed to register five million uniu of new out-specialize or aut-perform the others.
automotive vehicles a year bespeaks the Hino Motors and Nissan Diesel specialiu in
ezistcnce of a strong replacement demand. trucks; 5uzuki specializes in light cars and
In 1979, the nation owned a total 36.23 Daihatsu also devotes a major part of its
million units or 312 vehicles per 1,000 people. production tn light cars. Of the remaining
In the case ef passenger cars, 57.2 pcrcent of seven makers, 'foyo[a and Nissan are
households owned cars as against 22.1 competing fiercely with one ano[her for the
percent 10 years ago-an inerease quite leadership position iu thc production of
remarkabie by aay standard. pass~nger cars. In 1980, Toyota commanded
The cate of car ownecship varies widely a 37.3 per.ent sL-~are uf the macket (excluding
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light r,ars) and Nissan was pressing close Daimler-Benz all ranked above Toyota. (In
behind with a market share of 29.2 percent. 1980, however, Toyota and Nissan sal~s grew
The third slot is contested br.tweta Mitsubishi shar~+?y, while those of Western makers fell,
(9.2 percent) and Toyo Kogyo (S.4 percent). and consequently the rankings mentioned
Isuzu, which is largely devoted to the pro- at;~ve na~� changed considerably.)
duction of trucks, trails next with a market The recent s'~arp deterioration in pecform-
- share of 4.9 percent and is followed by Honda, ance of Westem 3utomakers and the match-
which is at 4.3 percent but exports a substan- ing increase in sales of Japanese cars in over-
tial part of its production. seas markets have underscored the potential
Some of thess leading makers have formed competitive strength of Japanese cars-far
loose coalitions with each other, e.g., Toyota stronger than the sizes of their sales and
with Hino and Daihatsu, and Nissan with profits would indicate-and this reflects the
Nissan Diese! and Fuji Heaw Industries. :apid increase in the labor productivity which
Members of each group coordinate in tl~e Ja~.~anese automalcers bave achieved in recent
fields of production; commission the produc- yeara. On the average, Japanese auto-
tion of certain parts to one another and makers require a far smaller number of man-
conduct joint research and developmen~ I~ours per L;+it than their Western competitors.
In addition, Japanese makers have entered In 1979, Ght employe~ 353,000 workers,
cooperative anangements with overseas Ford 494,0~0 workers and Fiat, the leading
automakers, e.g., Mitsubishi with Chrysler, automaker i~ Europe, 360,000 worke~s; even
_ Toyo Kogyo with Ford and Isuzu with lesser European makers employed more than
- General Motors. Given the intensifying ?00,000 w~orkers. By contrast, 'Toyota em-
trade fricticn and the gro~.ving need for the ploycd appro!cimatcly 47,000 workers in 1930
adjustment of marketing interests among the (or 52,000 workers wb~n the employees of
auto industries of different countries, there Toyota Auto Sales Co. are included) and
have emerged growing sig~s of a movement Nissan approximately 56,000 workers. In
toward international cooperation. Recent other words, GM required 16 times as many
examples of such efforts include the talks employees as Toyota to achieve sales 4.7
that are going on between Nissan and times those of Toyota, and Ford needed
Volkswagcn, those between Toyota and nine times zs many employees to achieve
Ford (though current.ly stalemated) and the sales 3.1 times thosc of Toyota. Of course,
licensed production of Honda vehi..ies by allowance must be made for the fact that
Btitish Leyland. both GM and Ford manufacture a mu:~h
As noted earlier, the Japanese auto industry larger percentagc of their own parts than
has out�performed its competitors in terms either Toyota or iVissan and that the number
of unit producti~n. However, the dollar of employees of GM and Ford cited above
value of its sales lags far behind that of its includes those engaged in non-auto business.
Westem compecitors, largely because of the Even allovr'~g for such factors though, the
low pricc that it~ products command. For fact remains that the Japanese automakers
i~stance, Toyota, the largest automaker in employ a far smal(cr number of workers for
Japan, had sales e.'i S14 biliion in 1979, while the production of one unit than do their
GM and Ford had sales 4.7 times and 3.1 Western competitars. In terms of value-
times that respectively. In terms of profits, added production per employee (recurring
GM and Ford sales were 5.7 times and 2.3 profit plus financial income plus depreciation
- timss larga~, respectively, than Toyota. In plus wages and salaries), Toyota (since 1975)
terms of sizP of sales as well, in 1979 Fi..lt, and Nissan (since i978) have outpaced both
Peugcot-Citroen, Volkswagen, Renault and GIv1 and Ford. Despite the fact that the
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}~n orFir~:~~_ u~~~ c~~~.ti.
scales of production facilit;es of Toyota and technological development of auto manu-
Nissan are only a third or a quarter of facturers, particularly casting, press, metal
thos~ of GM and Ford, per capita capital cuttiag and fabri~~ing, was too backward
equipment ratios of tkese Japanese makers to establish a mass-production system. On
are three to four times those of GM and t;,p of that, the kna;kdown cars assembled by
Ford-and one has to reckon further with Japanese subsidiaries of the American Big
the fact that tne Japanese production Three since the Kanto earthquake of 1923
facilities are more up-tu-date and advanced came to control the market, leaving little
than those of their Nestem competitors. room for domestic ?nakzrs to grow. It was
Another feature oF the Japar.ese auto not until I933 that the number of home-
industry is the fact that aithough the auta built cars reached 1,000 units. Nleanwhile,
makers con[ract out large percentages of the number of imported cars continued to
their automotive parts nerds, thanks to close increase from 15,000 units in 1929 to 36,000
coordination with their contraciors and the units in 1933.
~ availabiIity of a!arge number of technically In these circumstances, the Japanese auto
advanced parts manufacturers, they have aot industry sougbt to gain a foothold in the
experienced any difficuity in obtaining sup- domestic market by concentrating on the
plies. production of Trucks. Tbis move took place
A[hird feature ~s the highly stabili;ced under the active encouragement and protec-
industrial relations and the high mur~e of tion of thc military, ~vhich attached great
Japanese auto industry workers. Hourly impoctance to the establishment of a home-
wages are lower than ihe UA~V's ~18 (which grown suto industry. The milit,~ry had been
is hi~h even by U.S. standards) but are equal giving active ~ssistance to domestic auto-
to ra~o-thirds of those of U.S. autoworkers makers from as iar back as 1914, and in 1935
or on par with those of ruro~;:an auta it helped tnact an Automotive Vehicle
workers. Althoug~ hourly wages ha~�e been Nianufa~turin~ Business Law with a view to
~ rising yearly, the rate o: increase ; as remain- protecting che domestic auto industry by
ed within the scoue of ir.creases in labor restricting the impoR of foreign cars, es-
productivity. As a:~sult, Japauese auto- pecially chose from the United States.
~ makcrs have bee,~ able to strengthen their Ser.sing tius growiog prcferenc