JARA NEWSfromJapan Automotive Recyclers Alliancewww.jara.co.jp
Gathering with rebuilt parts
manufacturer partners

February 2017, No. 108

Published by JARA Corporation
Tokyo Head Office: Shinawa Bldg. 1-2-2-7F,
Nihonbashi, Chuo-ku, Tokyo JAPAN 103-0027
Phone: +81 3 3548 3010 / Fax: +81 3 3231 4690

upgraded contents through tightened relationships
with RP-GP providers. In the case of previous
workshops, many attendees said that they wanted
more-in-depth technical training.
JARA holds gathering with rebuilt
manufacturer partners

JARA aims to purchase
10% more rebuilt parts
in FY2017
JARA Corporation has set a goal of purchasing
10 percent more rebuilt parts and new parts madeby non-JARA members in fiscal 2017. The
company aims to strengthen its ties with rebuilt
parts manufacturers and, meanwhile, the JARA
order reception center will actively hold sales
promotional campaigns and technical workshops
throughout the fiscal year.
These objectives were announced at the 4thGathering with RP-GP (rebuilt parts and genuine
parts) providers. Last year, JARA’s purchases ofsuch parts stood at 111 percent compared to a year
earlier, which is short of the company’s goal of
115 percent, which JARA said it missed due to thelate launch of promotional campaigns and otherfactors.
This fiscal year, JARA intends to allocate staff
members who will be exclusively in charge of
RP-GP manufacturer and who will actively call on
them. It is also considering the holding of
periodical block meetings with providers.
Moreover, in order to assist the businessperformance of members of ATRS (automobile
total recycle system), JATA will hold system
operation workshops.
With regard to sales expansion at the JARA
order reception center, the company will set goals,
such as those related to promotional activities
aimed at existing customers. It will launch seventimes the promotional campaigns it conducted last
fiscal year. In order to raise awareness of JARA, it
will place a banner advertisement on the Japan
Automobile Service Promotion Association’s
FAINES website. Renewal of JARA’s website isalso planned to further increase orders.
Technical workshops will be prepared with

JARA Corporation held on January 19 the 5thGathering of RP-GP Providers at Tekko Kaikan inTokyo. The event was attended by representativesof rebuilt manufacturers and JARA executives, fora total of 34 people. They looked back at the
FY2016 sales results and then exchanged opinions
about the sales target and sales promotion
activities for this fiscal year.
JARA Corporation President Sosho Kitajima
said, “We would like to hear your frank comments
and new proposals. And then we will make thisyear a year of significant advance.” (Daily
Automotive News, January 26 issue)

Kurihara to head JAPRA,
eyeing closer contact with
ELV association
The Japan Automotive Parts Recyclers
Association (JAPRA) held its 6th General Meetingon December 21, 2016 and announced a new
executive team. Automotive Service Parts
Association Chairman Hiroyuki Kurihara assumed
the position of JAPRA Chairman, while JARA
Group Vice Chairman Yuji Imai, NGP President
Yukio Sato and Rebuilt Manufacturers Associationof Japan Chairman Koji Fukazawa became JAPRA
vice chairmen.
At a press conference on the same day, the new
Chairman Kurihara expressed his aspiration,saying, “I have a sense of great responsibility infulfilling my duties in such an importance role atthis association, which has a long history. Despite

New JAPRA Chairman Kurihara, right,
and former Chairman Nobuo Shimizu, left
tough issues such as declining ELVs and the fall inmaterial prices, I want to tackle challenges toinvigorate the industry.” He also stressed: “Eachgroup faces declining memberships. So far,
JAPRA focused on recycled parts, while the ELV
Recycler’s Association made dismantling its main
focus. From now on, both parties should closely
communicate with each other. We want to takeactions to protect our industry.”
Meanwhile, JAPRA announced its theme of“Promote Visualization of Parts Quality and CO2
Reduction Effect” for this fiscal year, and alsoplans to more actively participate in the
Automotive Recycled Parts Promotion Council,
which consists of the General Insurance
Association of Japan, the Japan Automobile
Service Promotion Association, the Japan Used
Car Dealers Association and the Japan Auto Body
Repair Association.
JAPRA will also continue to survey members
to determine the size of the market. The contentsof the survey will be refined to get a more accurate
view of the recycled auto parts market. (Daily
Automotive News, January 5 issue)

CO2 Reduction Effect(based on Super-Line System)

The use of Reuse Parts saved

2,891 tons of CO2 emissions
in December 2016
The reference figure represents the difference ofcarbon dioxide (CO2) emissions at the vehicle repair
using genuine (new) parts and recycled parts.**: Based on "Green Point System", which was jointly
developed by the Japan Automotive Parts Recyclers
Association and Waseda University Environmental
Research Institute using a life cycle assessment (LCA)
technique.

JARA NEWS No. 108 February 2017 Page 2
The world
is watching
President
Trump

Launch of U.S. Trumpadministration has auto
industry watching
In the United States, the Trump administration
kicked off on January 20. New President Donald
Trump, before taking office, had often made extreme
remarks and verbally intervened in issues related tocorporate investments. The world is closely watching
how U.S. trade, environment and diplomatic policies
might change.

Canada and Mexico that it intends to negotiate theNorth American Free Trade Agreement. He also
criticized the Trans-Pacific Economic Partnership
Agreement, by saying, “It is disadvantageous for theAmerican auto industry.”
Although there is uncertainty concerning hightariffs and a “border tax”, which Trump emphasizing
during his election campaign, the auto industry will
be forced to respond to maintain production inside
the region if the administration strictly applies
NAFTA’s rule of origin. “We will adjust if NAFTA
changes,” said Nissan Motor Co. CEO Carlos Ghosn.
The U.S.’s pulling out of TPP talks is alsoa negative for the industry. On January 20, theJapanese government announced cabinet approvalfor TPP and then informed TPP secretariat New
Zealand. A Ministry of Economy, Trade andIndustry (METI) official said, “We will continue
to stress to the U.S. the importance of TPP.” Abouta bilateral agreement between the U.A. and Japan,
Ross mentioned that, due to a barrier in the form of
NAFTA’s rule of origin, “Preferential tax treatment
will be only be applied to vehicles built in Japan.”

NAFTA review seems inevitable
The first thing the manufacturing industry is
closely watching is U.A. trade policy. U.S. Secretaryof Commerce Wilbur Louis Ross announced at
his confirmation hearing that the U.S. will informPossibility of remaining member of Paris agreement
Concerns of global warming are growing.
President Trump chose persons who are skeptical
about global warming for three major posts, such asadministrator of the U.S. Environmental Protection
Agency (EPA).

ELV acquisition falls fortwo consecutive years undergrowing exports

11 consecutive months.
Used vehicle exports contributed the most to thedecline in ELV acquisition. In 2016, deregisteredvehicles for export numbered 1,314,308 units. Althoughthat was an 8.0 percent drop from a year ago, asignificant portion of ELVs was still sent out of Japan.
“Vehicles that essentially should become ELVs in Japanare exported. ELVs are pre-consumed by exports”,
says JARC. The average age of vehicles is 9-10 years
for those that are exported, compared to 14.9 years for
those that become ELVs in Japan. This means that “ELVgeneration will continue to fall from next year andafter”, according to JARC.
For fiscal 2016 ending March 2017, the number of
ELVs is expected to be around 3.06 million units. JARC
had originally forecasted that the number would be
3.3 million units if the consumption tax was increased
as planned or that the number of units would drop byaround 110,000 vehicles if the consumption tax was notincreased”. Actually, the figure is likely to further fall.
Expectations are about the same for fiscal 2017. For
December alone, ELV acquisition increased 1.0 percent
on the year to 251,866 units. (Daily Automotive News,
January 19 issue)

The declining number of acquired ELVs shows nosigns of stopping. According to the Japan Automobile
Recycling Promotion Center, ELV acquisition declined
5.0 percent from a year ago to 3,044,205 units incalendar year 2016. Although that was still above the
3 million-unit-mark, it resulted in the second straightyear of decrease. The 2016 figure was the lowest, withthe exception of 2005, when the Automobile Recycling
Law went into effect, and 2011, which was affected by
the Great East Japan Earthquake.
Last year, recyclers saw a series of shutdowns andbankruptcies. This year, recyclers still face tough issues,
such as the shortage of ELVs, a transport cost hike,falling material prices, and changes in ELV distribution
routes.
ELV acquisition has been shrinking due to declining
ELV generation and expanding exports of used vehicles
buoyed by growing overseas demand. Compared withthe peak of 3,927,524 units in 2010, the figure was
reduced by about 883,000 units in 2016. On a monthly
basis for 2016, year-on-year increases were recorded
in only September, November and December. Until
September, a year-on-year drop had been recorded for

The fall in ELV acquisition continues

METI and fair trade commission set
panels for big data competition policy
Talks began in Japan regarding how big data should
be positioned in competition policy. The Ministryof Economy, Trade and Industry (METI) and Japan
Fair Trade Commission (JFTC) separately launched
its own council of experts to discuss about thatmatter. Organization for Economic Cooperation andDevelopment, and competition policy authorities inGermany and France are also involved in the big data
discussion. In the auto industry, big data in conjunction
with connected cars and ride sharing services is about tocontrol the competitiveness of products and companies.
Such talks will attract attention.
METI established ” A Study Group for Ideal
Approaches to Competition Policies for the Fourth

However, Trump, who stated during his campaignthat he would take the U.S. out of the Paris agreement,
might not do so. A METI official, who met withmembers of a U.S. think -tank on environmental issues
said, “President Trump has realized the value of theParis agreement and is likely to use it in making deals
rather than pulling out of it.”Even so, the efficacy of the agreement could
diminish if the U.S. wavers in its support of funding of
it. Greenhouse gas emissions would increase if the EPA
applies softer standards that take into consideration
American automakers.
On the other hand, on January 10, more than
600 U.S. companies and groups, including Du Pont,
announced their request for tighter measures against
global warming. Moves are afoot for urging the
Trump administration to take action. A Ministry of
the Environment official said, “Ways of addressing
such in the U.S. are multilayered. Even if the federal
government starts heading in the opposite direction,
moves toward tightening environmental regulations
would remain unchanged in such states as California.”
Diplomacy under Trump, with comments hinting
at a closer relationship with Russia and a strict eye on
China could lead to confusion for Japan and the world.
A METI official warned, “Japan might get pushed
around if the relationship between the U.S., China andRussia drastically changes.” (Daily Automotive News, January
21 issue)

Added-value coming from big data

Industrial Revolution. JFTC will also hold thefirst round of “Review meeting regarding data andcompetition policies” on January 20. Each party is tohold the meeting once a month and to compile report
before summer.
Both meetings focus on how to handle big data,
which is growing explosively due to diffusion ofsmartphones and IoT development. It provides added
value, but on the other hand it allows establishedplatform company to dominate the market and thepower to eliminate competitors. That is concern incompetition policy. OECD expressed such concern bysaying, “If the companies use a common price-decisionalgorithm, market data-driven “digital cartels” could beallowed.” German and French authorities also pointed
out in a joint report that more detailed examination
should be needed to control the data enclosure. METI
thus will enter discussions focusing on how to build
a fair competition environment so as to promote
innovation using big data. JFTC goes to consider
measures by compiling issues in light of execution ofanti-monopoly act.
In the auto industry, vehicle behavior data has
already used to analyze traffic congestion status andavoid accidents, as well as to anticipate failure thereby
recommending repair. Big data of vehicle and customer
is also essential for autonomous driving and ridesharing services. As such new businesses are expected
to grow in our society, competition policy review will
attract much more attentions. (Daily Automotive News,
January 19 issue)

JARA NEWS No. 108 February 2017 Page 3

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