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Cato: Leaving their troubles behind, Japanese auto makers on the rise again

Models unveil Honda Motor Co's S660 concept car during a presentation at the 43rd Tokyo Motor Show in Tokyo November 20, 2013.

Toru Hanai/REUTERS

Each holding a right fist in a "thumps-up" gesture, Toyota Motor president Akio Toyoda and Honda president and CEO Takanobu Ito are smiling out at me as I hold up my Japan Times to the light. The 43rd Tokyo Motor Show is front page news here in Japan's capital. And the Japanese car industry has plenty to be happy about in 2013.

All of Japan's major auto makers are profitable and growing. The Japanese Automobile Manufacturers Association (JAMA) reports a record 76 world vehicle premiers are being showcased here within the halls of Tokyo Big Sight where the biannual event is held. Excitement and anticipation are in the air, that with a dose of self-confidence that's been missing for years and years. With good reason.

Japan's car makers are on the rise again and that itself is big news. Toyota is the world's biggest car company and is reporting record profits, despite a drop in global sales. Nissan officials say their Power 88 plan – calling for 8.0 per cent global market share and 8.0 per cent profit margins – is on track. Honda is growing, touting its new Earth Dreams power train technology, a sporty new crossover that will go on sale in Canada next year and a sexy little rear mid-engine sports car called the S660 Concept.

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Meanwhile, Mazda is profitable for the first time in five years, cannot produce the CX-5 crossover fast enough to meet global demand and is to open its first assembly plant in North America – marking an expansion outside of Hiroshima long needed. Mitsubishi, seemingly back from the dead, is confident enough to show three bold-as-brass concept vehicles here. The sights in Big Sight are as happy and harmonious as I've seen in Japan years.

This is all in stark, stark contrast to 2011 and 2009. The last two Tokyo car shows struggled to overcome troubling events outside the halls. Whacked hard by a strong yen currency that made exports from Japan unprofitable, as well as natural disasters, product missteps, recall woes and a Japanese home market marked by diminishing interest in new cars – especially among young people – the last two Tokyo shows were mostly an exercise in damage control.

Indeed, in 2011, Japan's auto industry was reeling from the impact of the earthquake and tsunami that triggered the nuclear disaster at Fukushima Daiichi. Even as I write this in late November in Tokyo, the Guardian is reporting that the plant is being completely decommissioned and the clean-up may take 40 years. All of Japan's nuclear power plants have been shuttered, too. The disaster, which started in the spring of 2011 with a massive earthquake that resulted in a tsunami, levelled Honda's research and development centre. Key auto suppliers to many Japanese car companies big and small had their facilities either gravely damaged or utterly destroyed.

Then came floods in Thailand that had a further impact on the production of Japanese car companies, most of which have extensive supplier and assembly facilities in Thailand. All this threw the Japanese car business into chaos. As a result, a staggering amount of Japan's auto production was shut down for long periods throughout 2011 and even into 2012.

Naturally, a pall hung over the show in the fall of 2011, though the Japanese car companies collectively tried to put a positive spin on a crippled industry. And let's not forget two years before that, in the late fall of 2009, the whole world's auto industry was being hammered by the global financial crisis.

So these have not been happy times for a Tokyo show going back nearly 60 years to the first one in 1954. Tokyo over the years had become famous for wild and fanciful concept cars that looked into a possible future with wit and an almost child-like amusement at the possible, even if it might be ultimately unattainable.

The crazy concepts were in short supply in 2013, but something far more telling seems to have happened: the events that so strained the Japanese auto industry appear to have brought the car companies together, not torn them apart.

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At a kickoff event the night before the show opened to the world's media, senior executives from all the JAMA members gathered on stage to salute their collective response to the disasters that started with an earthquake on March 11, 2011. Rather than fracture, the car companies – in what insiders say is quite typically Japanese fashion – focused on disaster relief and then rebuilding with an urgency and energy unseen for years and years.

Akio Toyoda led off with a talk about "Monozukuri" which translates into "making things." An island country with few natural resources has long been good at Monozukuri, but that spirit, Toyoda and others suggested, may have gotten lost for a time. It has since been rediscovered and that suggests the rest of the world's auto makers and car buyers should take notice of the 43rd Tokyo show.

One by one, the leaders of Japan's major car companies took the stage to underscore a resurgence of the Japanese car industry. They talked about Japanese craftsmanship and new technologies such as autonomous driving and the electrification of the automobile. Mazda CEO Masamachi Kogai even addressed the big gorilla in the room: "We are not making cars young people want," he said. That must change, they all agreed in a Q and A session.

If nothing else, this year's Tokyo show looks and feels like it's representative of a Japanese auto industry that has emerged from a decades-long bubble of complacency. Perhaps it was the earthquake and following disasters that bust that bubble. Perhaps it's the realization that global competition in this business is at a fever pitch and to survive and thrive, Japanese car companies must be far, far more outward-looking than they've been collectively for many, many years.

The invention that was a hallmark of Japanese car companies seems now to have ben mothered by crises and disasters. These things have hardened the Toyotas, Nissans, Hondas, Mazdas and Mitsubishis of the world – and all of Japans other auto makers, too. The industry in Japan is now looking ahead, using the 2020 Tokyo Olympic Summer Games as a target and as inspiration for innovation. Looking for proof? Cruise the halls of Tokyo Big Sight between now and when the show closes on Dec. 1. You'll find it.

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About the Author
Senior writer, Globe Drive

In 25 years of covering the auto industry, Jeremy Cato has won more than two-dozen awards, including three times being named automotive journalist of the year. Jeremy was born in Montreal and grew up in the San Francisco Bay Area. More


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