Around the world, the automotive industry is taking a close look at the minicar concept, a concept that has long been Daihatsu’s mainstay.Daihatsu Motor Company Ltd. was ranked exactly in the middle of Japan’s automobile manufacturers in 1998 for domestic sales. But in the segment of minicars, Daihatsu’s Move model challenges the top position. In 1998 Japan saw the worst decline in new car sales since 1974. The 1998 figures could have looked even worse – but a boom in minicar sales cast a rosy glow over the statistics.
“The minicar has several convincing advantages: low fuel consumption, low price and low automotive tax,” says Kunio Asakura, deputy general manager of the parts purchasing department at Daihatsu Motor Co. Ltd.
Minicars fit the Japanese lifestyle perfectly. In Japan cars are mainly used for daily errands and smaller trips. The average Japanese car clocks about two-thirds of the yearly mileage that cars in Europe do. For one thing, most of Japan’s 126 million people do not take their cars on holiday. Because everyone tends to go on vacation at the same time, overcrowding is common. And while most Japanese can endure overcrowded railway stations and airports, they can’t endure hours of traffic jams. Meanwhile, in large urban areas it is neither convenient nor efficient to commute by car. In crowded Japan, compact is efficient – from compact living to compact cars.
But minicars were not always so popular. Minicars were thought to be not cool, definitely not fast and the obvious victim in any collision. But the government revised a law in October 1998 that set new size standards for minicars, defined as cars with a maximum engine displacement of 660 cubic centimetres. Manufacturers were allowed to increase the length of these vehicles by 10 centimetres to 3.4 metres, and the width by eight centimetres to 1.4 metres.
“This helped us meet stricter safety requirements, such as passing crash tests at 50 kilometres per hour, the same as for full-size cars. Increased safety greatly helped improve the minicars’ competitiveness,” continues Asakura. And created a boom in minicar sales.
Daihatsu aims to improve safety and comfort still more through the Intelligent Traffic System. One feature of the ITS is the Rear Crash Avoidance System, which is now under development. This estimates the distance between vehicles, and can activate an automatic brake if the vehicle moves within a certain distance of the car in front. The Total Advanced Function body makes the car stronger from all sides, since there is special support for side collisions.

On the Move
In the most prominent place in the showroom of the Daihatsu headquarters, the parade car Move is displayed. Move features an anti-shock body and a high-performance engine. Both front seats have air bags in all versions. In Japan, Move is priced from 920,000 yen (US$7,650). The average Japanese household earns six times that in a year.
Daihatsu headquarters are situated in Ikeda City, Osaka. The company has six plants in the Kansai area.
When Daihatsu was started in 1907 it sold gas compression ignition engines. The company’s first three-wheeled vehicle, Model HA, hit the roads in 1930. In 1957, the launch of the Midget was the company’s first step in the compact direction.
In October 1998 Toyota Motor Corporation acquired 51.2 percent of the shares and brought Daihatsu into the Toyota group fold. “The world trend among manufacturers is to merge,” says Asakura. “A merger was probably inevitable to keep production efficient.”
Asakura notes that with Toyota working closely with Daihatsu, both companies can concentrate on their specialities much more efficiently. “For us, nothing has really changed,” he says. “The Daihatsu identity and brand will go on as before.”
The trend toward mergers has affected auto-parts manufacturers as well – a situation that will eventually mean increased demand for auto-parts systems, according to Asakura. “Integration of component suppliers means several advantages,” he says. “Time, cost and labour involved in dealing with numerous suppliers can be reduced, and we can be more efficient. We have to look for the best sourcing globally.”
Daihatsu cars are present in almost 160 countries. The first export was about 40 years ago, when the Midget entered the Thai market. The company has assembly plants in Indonesia, Malaysia and Vietnam, but the economic situation in the region forced Daihatsu to cut local production in half in 1998, compared with 1997.
Prospects look brighter in the European market. Move, Sirion (Japanese model Stòria) and Gran Move (Japanese model Pyzar) were launched there in the beginning of 1998. “We face severe competition from European car makers, such as Fiat and Renault, so we have to compete in cost and function,” says Asakura. “Fortunately, the demand so far has proved strong.”
In the United States, however, Japanese minicars get totally pushed out of the market by the big cars. “We quit marketing to the U.S. market in the mid-’90s,” says Asakura. “Americans have a natural taste for big, so the concept of minicars just didn’t work.”

Counting the minutes
As bright as the future looks for Daihatsu in the minicar segment, the company’s success really depends on winning over the next generation. “They are the next Daihatsu users, or our next innovative engineers,” says Yoichi Hosokawa, a coordinator at the parts-purchasing department. Which is why, he says, official tours of the company, especially visits by school children, fill an important function.
It is easy to be fascinated by the efficiency and accuracy of a Daihatsu plant. On one computerised adjustable assembly line, up to five different car models can be assembled. The Move tyre arrives on a conveyor belt in time to be fitted on the Move body that approaches on another belt, followed by a Stòria kit. “This is the country’s fastest conveyor belt,” Hosokawa says. “We calculate one minute to assemble one car, and there are about 20,000 working minutes every month.” The assembly time is the total time that a person or a robot is actually fitting something on the car-to-be, not the time it spends on the assembly line. Easy maths, but nevertheless hard to grasp. A clock starts ticking every time the assembly line stops. It doesn’t happen often though. Hosokawa points at the clock and reckons the workers maintain an efficiency rate of 96 percent.
High efficiency may well be the key to meeting the high sales goals set for 1999. “This year, we plan to increase our sales by about 20 percent,” Asakura says. But backed by more than 40 years of experience in the minicar market, the company will probably rise to the challenge. This is Asakura’s prediction, and many market analysts concur. So it’s likely we’ll see Daihatsu reaching the top sales spot in Japan in the very near future.

Maria Olsson
a writer with Text Inc., Tokyo
photos Daihatsu Motor Company