Just how seriously will Toyota's problems affect the Japanese economy ?

[A ke bono kane kotto]

Earlier this month Newsweek published the shocking headline Toyota and the End of Japan. Toyota, they say, is "largest and virtually the last remaining face of Japanese manufacturing and trading prowess."

BUT

"Toyota was a symbol of recovery during our long recession," says Ryo Sahashi, a public-policy expert at the University of Tokyo. Now Toyota's trouble "has damaged confidence in Japanese business models and the economy at a time when China is surpassing us."

AND

Many other top Japanese manufacturing brands lost their made-in-Japan luster, says Michael J. Smitka, an economist who specializes in the Japanese auto sector. Sanyo is gone, its pieces sold off in a restructuring. Toshiba and Fujitsu also are reorganizing. Sony is as much a Hollywood hitmaker as a Japanese manufacturer, and Mitsubishi Motors, Mazda, and Nissan have all had tie-ups with foreign companies through the years. In the early part of the last decade, particularly under the maverick administration of celebrity prime minister Junichiro Koizumi, Japan made fleeting attempts to promote itself as the land of the new new thing: nano-this, bio-that. Nothing stuck. There is still no Japanese Google.

The Japanese automobile industry is in free fall. The electronics sector has experienced some difficulties, but Sanyo's case is not representative. The true leaders of the industry are still there and flourishing : Panasonic, Hitachi, Sony, Casio, Canon, Nikon...

In many ways, Toyota is symptomatic of a nation that has lost its way. According to a 2008 Pew survey, Japanese were more dissatisfied with the direction of their country than almost any other nation, including Pakistan and Russia.

That's because the Japanese are insecure, worrisome and not easily satisfied by nature. It is on this trait of character that the Japanese perfectionism was built. I am sure that many Africans are quite unperturbed about their country's future. Does that mean that things are going well ? No ! People who don't worry enough do not change enough, do not try hard enough to improve things...

The real worry with Toyota is this.

"Toyota represents Japan all over the world in terms of Japanese culture and Japanese economy,"

Toyota's problems reflect badly on all Japan. People around the world usually don't know much about Japan. But they know Toyota. It's a symbol. If Toyota loses its immaculate image for reliability, people around the word will start doubting the reliability of all Japanese products. I know it's a very simple and reductionist way of thinking, but that's how many people think (about things that aren't close to them). This is the perfect "excuse" for people to stop buying Japanese and start buying cheaper but similar Korean or Chinese products. The image that "Japan = quality" has been shattered. The mediatic hype about this relatively minor problem is what has really damaged the image of Toyota, and by extent all the Japanese industry. That is the real problem.

[Gyabuchaa]

Toyota is a serious company. If people don't trust their quality anymore what will they sell ? It's not like people buy Toyota for their design... It's not a French or a German maker. You don't fall in love with the look of a Toyota.

Toyota will come back in the game. Ok, Nissan is French, Mazda is American and Mitsubishi Motors has no future. But Toyota isn't the only real Japanese car company left. What about Honda, Subaru, Suzuki, Daihatsu, Isuzu... Subaru has a very good reputation in France. Many times world champion of rally.

[Maciamo]

I don't understand how a car maker can represent a whole nation ? Why is it that Toyota is strongly associated with the image of Japanese businesses but other giants, like Panasonic are not ?

If there is one sector that is really in trouble in Japan right now it's not the car makers but the airlines. JAL and ANA are both on the verge of bankruptcy. This would leave Japan without any national airline. I suppose that the competitions from the other (usually very good) Asian airlines, like Korean Air, Cathay Pacific, Thai Airways, Malaysian Airlines or Singapore Airlines have a lot to do with it. European airlines seem more competitive too. I or my wife have been dozens of times between Japan and Europe and we never used JAL or ANA, almost always European airlines (because they are cheaper and just as good). Toyota is a long way from being bankrupt.

[Maciamo]

This discussion reminded me of what Carlos Ghosn, CEO of Renault and Nissan, said back in 2002 : What Japan needs is a vision.

I remember that when I was working in Tokyo's financial district Japanese businessmen talked a lot of Carlos Ghosn. He made the front cover of GQ Japan. He was a star, and the Japanese were eager to learn from the man who gave Nissan a new lease of life. Many years have passed and all I see is that Japanese businesses still haven't learnt their lesson. It's not just politicians that lack charisma in Japan. Business leaders too lack vision and panache. Japan may be at the fore of new technologies but its culture remains traditional (nostalgic of the past), inward-looking (rather than global-minded), and, as Gyabuchaa said, Japanese cars do not have the same charm or attitude as European ones.

If there is one sector of the Japanese economy that is globally trend-setting and thriving it's the pop culture industry, especially manga/anime and video game in Western countries, but also J-music and fashion in other East Asian countries.

TIME Asia : What's Right with Japan

By now, you are no doubt familiar with the prosecution's case: Japan is in the midst of a long, slow slide into irrelevance. Those aiming to prove that thesis have held the floor for years. Their evidence is compelling. Despite a recent rally, Japan's stock market remains 75% off its 1989 all-time high. Zombie companies swamp the banks with bad debts, yet the banks refuse to cut off those deadbeat borrowers—which perpetuates the vicious cycle and ties up capital that should be put to better uses.
...
According to an increasing number of believers, Japan's days as an industrial powerhouse may well be on the wane, but its role as a global trendsetter—in cutting-edge music, art, fashion, design and other pop-culture categories of every stripe—is only now just getting started. In Japan, they say, the future is cool.

[Sharingan]

The Japanese automobile industry is in free fall. The electronics sector has experienced some difficulties, but Sanyo's case is not representative. The true leaders of the industry are still there and flourishing : Panasonic, Hitachi, Sony, Casio, Canon, Nikon...

Don't forget Sharp, Epson, Konica-Minolta, TDK, NEC, and of course Nintendo, SEGA...