Japan’s Kei Cars

When I was writing the post about the tier 2 manufacturers in Japan recently, I learnt about Kei Cars.

A “K” in Germany means short as in the famous Porsche 917K racing machine and the Mercedes SLK, a short SL. In Japan a Kei car is a light car, designed to take advantage of Government tax breaks and lower insurance rates. How many times have we seen a company design a product to meet a Govenment regulation?

Similar to regulations in Europe after the war, where manufacturers produced micro cars, mopeds and small motorbikes, the Japanese Government wanted to help rebuild the economy by getting more people mobile and as with Europe, they implemented regulations that encouraged the manufacturers to develop small, efficient cars.

Even more similarly to Europe, these cars were designed around motorcycle engines which were light, economical with limited power – enough to do the job cheaply! The first Kei in 1949 were limited to between 100 and 150cc and this rose to 360cc by 1955. As you can imagine, this was a boon for companies who also made motorcycles such as Honda and Suzuki. Others like Daihatsu and Subaru also managed to get in the market. As with other forms of transport, technology soon flowed downwards from luxury to standard to the Kei and during the 60s many manufacturers had added equipment seen on their larger cars. The miniaturisation of technology also helped, so these cars became quite comfortable with safety features seen on larger vehicles.

In 1976 the engine size was increased to 550cc along with larger dimensions of the vehicle by new regulations. Strangely the earlier oil crisis had not helped local sales of these cars, which were sliding downwards. The industry had to lobby the Government to make the changes because knock-on regulations were impacting sales. Around this time, the rest of the world started taking notice of these cars – especially in countries where motorists were affected by rising oil prices. Japan started to export to Europe and South America which helped profits and ensured that more people could afford to drive.

The regulations changed again in 1990, engine size was increased again to 660cc, now smack in the range for the motorcycle manufacturers to benefit. This is a good size for a motorcycle and with today’s advances, a lot of power can be developed with great fuel economy. My personal belief is that this is one of the reasons why Audi bought Ducati recently. They will be able to offer lightweight but powerful engines for small city cars.

Today in Japan, Daihatsu, Suzuki and Honda still produce Kei cars. The other manufacturers have all dabbled in building them, however many Nissan, Mazda, Toyota and Subaru models are simply badge engineered cars from Daihatsu and Suzuki. A recent report stated that 40% of new sales in Japan are Kei cars, so there is still a market with young drivers who need a small set of wheels.

When you think about it, the Smart from Germany is a classic Kei car, in fact they imported the Fortwo into Japan and called it a “K” – unoriginal but descriptive! You can also buy a Kei truck too, miniature pickup trucks based on the Kei cars and perfect for urban deliveries, especially in the small, tight streets of central Tokyo!

It is financially beneficial to own a Kei in Japan despite the government implementing a special tax for them – the benefits still outweigh the penalties. Now, if other Governments would provide similar tax breaks, the Kei car could be seen in many more cities, especially owned and operated by car sharing systems where people need quick, cheap transport for an hour or two. Kei trucks would be perfect for picking up flat packed furniture for the ever increasing apartment dwellers!