4. Transportation Machine Sector

4. Transportation Machine Sector
4.1

Automobiles (four-wheeled vehicles)

4.1.1. Supply and demand trend(1) Outline

The environment of the world’s automobile industry has recently been in the period of greatchanges, including the steep rises in crude oil prices and growing environmental problems. Some ofJapanese automobile manufacturers have taken advantage of these environmental changes to hold adominant position in the global market, and their activities are attracting attention in Japan andabroad. However, most of Japanese automakers have problems, such as the domestic market notshowing much growth, and the domestic automobile industry is not generally in good form. The
present situation and future direction of the Japanese automobile industry are outlined below.
(2) Situation of domestic production

The domestic production of automobiles has been on the increase recently, and it is often said
that the automobile industry has freed itself from the difficulties after the burst of the bubble
economy. Figure 4-1 shows the trend of the domestic production by type of vehicle; as shown in the
figure, the production has been in an expansion phase in general. By product category, theproduction of passenger cars in 2006 was about 9.76 million, an increase of 700,000 over the figurefor 2005, i.e., 9.02 million. This was a higher growth than one in any other recent year. It isconsidered that the expanded production was supported by active export in most cases. Particularly,
rises in gasoline prices resulting from sharp increases in crude oil prices as well as the trend of
weaker yen have probably contributed to increasing export. But there may be some differences in thesituations according to the type of vehicle. While the production of standard-sized and light motorcars has shown an expansion, that of small-sized cars has been on the decline.
The production of trucks has dropped in contrast to that of passenger cars. This is partly
because trucks have not been able to secure the size of export as large as that of passenger cars, butmore important factors will be the fact that the replacement demand generated by the control ondiesel cars in Japan has reached a ceiling and that users have kept from buying new trucks inanticipation of a further control. The output of buses, especially small-sized one, increased. For
buses, too, rising export, instead of domestic sales, has supported the higher production.

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4. Transportation Machine Sector

Fig. 4-1

Trend of domestic automobile production by type of vehicle
Passenger cars

Standard-sized

Small-sizedLight motor

2002

3,671,023

3,637,501

1,309,830

2003

3,753,446

3,434,662

1,290,220

2004

4,044,563

3,309,147

2005

4,191,360

2006

TrucksSubtotal

SubtotalStandard-sized

Small-sizedLight motor

8,618,354

679,964

380,303

512,373

1,572,640

8,478,328

772,727

449,462

524,427

1,746,616

1,366,675

8,720,385

769,953446,536514,2021,730,691

3,416,622

1,408,753

9,016,735

723,663436,763546,185

1,706,611

4,915,367

3,302,326

1,538,822

9,756,515

699,410

419,404

520,267

1,639,081

Large-sized

Small-sized

2002

11,141

55,18066,321

10,257,315

2003

11,406

49,66861,074

10,286,018

2004

12,28648,15660,442

10,511,518

2005

11,76364,55076,313

10,799,659

11,06377,574

88,637

11,484,233

Buses

2006

Source:Subtotal

Total

Prepared based on the data of the Japan Automobile Manufacturers Association.

Fig. 4-2

Trend of domestic automobile production by manufacturer

ToyotaNissan

Honda

Fuji

2002

3,485,168

1,392,439

773,418

871,304

231,053599,541

1,386,379

436,355

2003

3,520,017

1,471,595

801,084

749,371244,575

641,236

1,170,941

450,0622004

3,680,946

1,439,007

818,730

639,883

218,352

679,485

1,242,528

491,792

2005

3,789,582

1,451,212

864,929

664,900

210,253

724,509

1,261,994

469,497

2006

4,194,188

1,234,400

966,547

758,478

230,807791,291

1,332,866

482,283

Nissan Diesel

Hino

Mazda

Suzuki

Mitsubishi

Isuzu

GM Asia
Pacific (Japan)

Daihatsu

Mitsubishi
Fuso

OthersAll
automakers,
total

2002

26,76854,170999,880

241

-

599

10,257,315

2003

38,848

83,122

980,731

1,012

132,745679

10,286,018

2004

40,107

93,837

1,045,735-

120,118

998

10,511,518

2005

41,071

96,985

1,090,786-

132,274

1,667

10,799,659

42,833

100,122

1,206,805-

141,503

2,110

11,484,233

2006

Source:Same as that for Fig. 4-1.

As noted above, the steady expansion of domestic automobile production is supported by thegrowth of export in most cases.
Fig. 4-2 shows the situation of automobile production by manufacturer. As shown in the figure,almost all manufacturers increased their production. The output of Daihatsu and Suzuki, whichmainly make light motor vehicles, shows an especially rapid expansion; this will suggest that lightmotor vehicles have established a firm position in the Japanese automobile industry. Mitsubishi had
reduced its production as a result of the recall problem but thereafter increased the output again,
recovering the 2003 level in 2006. Nissan is the only automaker that cut the production; thecompany had expanded the output steadily after the Ghosn reform, but a stop seems to have been put
to its upward trend recently. Attention should be paid to the company’s situations from now on
because Nissan decreased its output in the circumstance where the Japanese automobile industry issaid to have been doing well in general. As seen in the production by type of vehicle, even the
manufacturers mainly making commercial vehicles have tended to expand production. All of Hino,
Nissan Diesel and Mitsubishi Fuso increased their output, indicating that they have been recovering

884. Transportation Machine Sector

from the temporary slump. Hino made over 100,000 units in 2006, nearly twice the level in 2002.
Mitsubishi Fuso also boosted its production; after returning to the 2003 level in 2005, the company
further increased its output in 2006.
As described thus far, the production of four-wheeled vehicles in Japan appears to have beenraised on a steady pace. However, as seen in the case of small-sized cars and Nissan, the business
was not entirely favorable. In particular, supposing that the expansion of production in recent years
has been supported by export, it is highly likely that the situation of domestic production will beaffected by, among others, foreign exchange fluctuations and increasing overseas production. The
production of four-wheeled vehicles in Japan looks favorable from the outside but has a variety ofproblems, and there is the need to watch its future trend carefully.
(3) Situation of domestic sales

While the production of four-wheeled vehicles has generally shown an upward trend, their sales
can be said to have been forced to have difficulty. Figure 4-3 shows the situation of domestic
automobile sales by type of vehicle. The domestic sales have been on the decrease after hitting apeak in 2004. The reasons for this may include rising crude oil prices and environmental problems,such as the control on exhaust gas and diesel cars. Specifically, after reaching a peak in 2004, thesales of four-wheeled vehicles have shown a downward trend with 4.64 million units in 2006. By
type of vehicle, while the turnover of standard-sized and small-sized vehicles has decreased, that oflight motor vehicles has continued an upward trend: it increased from 1.39 million in 2005 to 1.51
million units in 2006. Light motor vehicles had been favorably accepted by the consumer in the
period of stagnant business conditions and have remained popular even in the revival phase due
mainly to increasing crude oil prices and to the introduction of attractive models. By contrast, thesales of small-sized vehicles fell again in 2006, though they had shown a little recovery in 2005,
decreasing below the 2 million units mark. It is supposed that the factor behind the lower sales ofsmall-sized vehicles is the fact that in the circumstance where light motor vehicles were received
favorably, a shift from small-sized vehicles to light motor vehicles continued. This seems to be thereason for the slower sales of standard-sized vehicles, too. As if to prove this fact, Toyota quickly
introduced Lexus, a high-class brand, while Nissan Infinity and Honda Acura have not put on themarket yet. This is probably because both of the manufacturers consider that the premium brandmarket has not been established firmly in Japan.
The sales of trucks and buses have roughly leveled off. This is probably because replacement
purchases as a result of the control on exhaust gas have peaked and because users are waiting andwatching how the control will be strengthened in the future.

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4. Transportation Machine Sector

Fig. 4-3

Trend of domestic automobile sales by type of vehicle

Passenger cars
Standard-sized

Small-sizedLight motor

TrucksSubtotalStandard-sized

Small-sizedLight motor

Subtotal

2002

674,0942,460,103

1,307,157

4,441,354

76,035739,502518,843

1,334,380

2003

1,229,907

2,194,194

1,291,819

4,715,920

208,752

373,259

509,044

1,091,055

2004

1,358,281

2,037,767

1,372,083

4,768,131

186,588361,449

519,067

1,067,104

2005

1,271,349

2,089,992

1,387,068

4,748,409

197,548351,708

536,648

1,085,904

2006

1,225,867

1,908,267

1,507,598

4,641,732

209,283

354,870

516,0211,080,174

Large-sized

Small-sized

Subtotal

All types,
total

Buses
2002

4,729

11,63016,3595,792,093

2003

5,862

15,341

21,203

5,828,178

2004

5,098

13,04918,147

5,853,382

2005

5,856

11,89817,754

5,852,067

6,064

11,536

17,6005,739,506

2006

Note:
Source:In January 2003, the classification system for sales statistics was changed from a chassis basis into a number basis.
Thus there is no continuity between the data before and after January 2003.
Same as that for Fig. 4-1.

Fig. 4-4
ToyotaTrend of domestic automobile sales by brandNissanMazda

Mitsubishi

Isuzu

Daihatsu

Honda

Fuji

2002

1,675,213

773,741

263,081

416,387

54,727504,596

892,868

255,375

2003

1,704,717

825,090277,783

367,034

86,104

541,855

715,119

243,824

2004

1,759,003

826,879

280,583

255,240

80,979577,809743,133

278,423

2005

1,703,185

866,226

286,919244,251

84,197

601,154714,115

258,2172006

1,660,380

766,763

269,152

263,488

91,982

622,484

702,291

245,234

Nissan Diesel

Hino

Suzuki

GM Asia
Pacific (Japan)

Mitsubishi
Fuso

Lexus

OthersAll
automakers,
total

2002

15,69433,210626,090522--

280,589

5,792,093

2003

22,24547,871

626,873

1,226

87,509-280,928

5,828,178

2004

19,70450,902

662,135-

73,293-245,299

5,853,382

2005

21,40754,528695,787-

61,171

10,293

250,617

5,852,067

2006

19,75453,952

691,033-

71,41431,097

250,482

5,739,506

Notes: 1. In January 2003, the classification system for sales statistics was changed from a chassis basis into a number basis.
Thus there is no continuity between the data before and after January 2003.
2. In January 2004, the sales statistics of registrants were changed from a manufacturer basis into a brand basis. Thus
there is no continuity between the data before and after January 2004.
Source: Same as that for Fig. 4-1.

Figure 4-4 shows the domestic automobile sales by the brand of vehicle. As seen in the figure,almost all manufacturers suffered declining sales. What is characteristic is the fact that Suzuki,
which had supported the boom of light motor vehicles and continued to achieve good sales, had slow
sales recently. Suzuki attained a higher position by introducing a new concept of Wagon R into themarket of light motor vehicles. In fact, Wagon R continued to rank higher than any other brand indomestic sales after the period of stagnant business conditions and took the first place in sales asshown in Figure 4-5. However, Suzuki’s inactive sales may have been the result of any other factor
than Wagon R. Toyota’s sales have been on the increase because the figure was 1.97 million units if
Lexus is added, though its sales of own brand vehicles in 2006 decreased from the previous year. On
the other hand, the brakes were put on the domestic sales of Nissan, which had continued to increasesteadily; the sales in 2006 fell by about 100,000 units from the previous year, a similar level to that90

4. Transportation Machine Sector

in 2002. It is also said that the company managed to secure this sales level by the sales of light motor
vehicles provided on an OEM basis. It is thus noteworthy what steps Mr. Carlos Ghosn will take toroll back in the months ahead.

Fig. 4-5

Ranking of the domestic sales of main models of vehicle
2006

Ranking

Note:
Source:Model name

Manufacturer

2005
No. of units

Model name

Manufacturer

No. of units

1

Wagon R

Suzuki

221,065

Wagon R

Suzuki2

Move

Daihatsu

147,731

Move

Daihatsu

236,701
196,977

3

CorollaToyota143,176

CorollaToyota149,8104Vitz

Toyota117,641

Alto

Suzuki143,092

5

Tanto

Daihatsu

106,410Vitz

Toyota131,935

The shaded items are those of light automobiles.
Prepared based on the statistics of the Automobile Dealers Federation, etc.

The sales of commercial vehicle manufacturers leveled off or decreased in almost all cases.
Mitsubishi Fuso was on an upward trend but has not attained the 2003 level yet. What is notable isthe situation of Isuzu, which is increasing its domestic sales. Isuzu owns leading diesel technology inthe world. With stricter control on exhaust gas imminent, Isuzu’s policies are noteworthy. Because
diesel engines are attracting much attention from the standpoint of reducing CO2 emissions, there
will be the need to watch Isuzu’s activities in the future. In particular, Isuzu’s strategies after its
alliance with Toyota are expected to play an important role as those of a diesel engine supplier in the
Toyota Group.
(4) Situation of export and importFigure 4-6 shows the situation of export of four-wheeled vehicles. As seen in this figure, theexport has been on the increase recently and has tended to support the sluggish domestic sales. The
export of passenger cars is increasing and recorded 5.30 million units in 2006, a growth of nearly
one million units over the previous year. The factors behind this are, as stated earlier, the fact thatdemand for fuel-efficient Japanese-made vehicles has been globally growing because of sharply
rising gasoline prices resulting from advancing crude oil prices and that the yen has weakened
recently. The export of standard-sized and small-sized vehicles have both been active, and because
crude oil prices are expected to remain high, demand for Japanese-made vehicles will continue in the
future. While the export of trucks is unlikely to grow due to high gasoline prices, that of buses isincreasing though the growth rate is not very high.

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4. Transportation Machine Sector

Fig. 4-6

Trend of automobile export by type of vehicle

Passenger cars
Light motor

TrucksSubtotal

Small-sized

2002

2,783,405

1,228,525

443

4,012,373

567,31370,218

62

637,5932003

2,856,312

1,222,433

1,753

4,080,498

553,406

76,78761

630,254

2004

2,995,259

1,217,013

1,755

4,214,027

591,236

96,450109

687,795

2005

3,164,603

1,198,273

292

4,363,168

521,856

89,938

162

611,956

2006

3,843,387

1,451,302

808

5,295,497

488,644

89,189141577,974

Large-sized

Small-sized

2002

9,332

39,43048,762

2003

8,279

37,31245,591

4,756,343

2004

11,68944,152

55,841

4,957,663

2005

9,953

67,984

77,937

5,053,061

2006

11,565

81,636

93,201

5,966,672

Buses

Source:SubtotalStandard-sized

Small-sizedLight motor

SubtotalStandard-sized

All types,
total
4,698,728

Same as that for Fig. 4-1.

According to Figure 4-7 that shows the situation of automobile export by region, the export has
increased in main markets, including Asia, Europe and North America. As seen in the growing
export to the North America region, it is considered that rising gasoline prices have greatly
contributed to the growth in the export of Japanese-made vehicles. The increase in the sales to the
U.S. is especially remarkable; over two million four-wheeled vehicles were exported to that country
in 2006. This situation has caused some people to fear that trade friction may be reignited between
the two countries.

Fig. 4-7

Trend of Japan’s automobile export by region

Asia/Middle East

Europeof which China

North Americaof which the EUof which the U.S.

2002

96,315845,966

864,941

949,699

1,841,637

2,076,298

2003

139,807963,680

1,019,753

1,159,706

1,594,157

1,786,387

2004

122,556

968,345

1,037,812

1,275,229

1,559,607

1,726,465

2005

62,151

939,661

897,704

1,178,197

1,662,939

1,854,438

2006

65,463Central America

971,902
South America

923,658
Africa1,305,861
Oceania

2,261,552
Others2,488,373
All regions, total

2002

142,807

144,358

144,979

385,455

9,166

4,698,728

2003

153,912118,385

146,269

418,202

9,802

4,756,343

2004

186,930

157,914

182,451448,671

11,658

4,957,663

2005

221,732

191,527

209,548447,922

10,036

5,053,061

2006

247,104

232,220

269,956

441,912

9,344

5,966,672

Source:Same as that for Fig. 4-1.

What is noteworthy here is the fact that the export to so-called newly industrializing regions isrising. Specifically, the export to Asia/Middle East, Central and South America and Africa has been
picking up, and it cannot be denied that economic growth in these regions has supported the growing
automobile export. It has been an important subject for Japanese automobile manufacturers how tomake inroads into the market of these emerging regions for future growth, in addition to the alreadymatured markets in Japan, the U.S. and Europe. As indicated by the increasing export, the emerging

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4. Transportation Machine Sector

markets will be recognized more as important ones in the years ahead as motorization is expanding
in these regions. But for some type of vehicles, the system for supplying from overseas production
bases has been built up. In this case, there will arise the problem of how the supply from Japan andthat from the overseas bases of Japanese automakers should be adjusted. In addition, Japanese
automakers operate their plants in the region where the market tends to grow. If Japanesemanufacturers make use of these overseas bases, it cannot be expected that their export from Japan
will rapidly go up in the future, though there may be some increase in export. Furthermore,considering the situation where export is supporting expansion in domestic production as thedomestic market slackens, Japanese manufacturers are faced with the problem of continuing theoperation of their plants in Japan, too. Thus they are not in a position to simply aim at increasing
their export. Strategies that try to adjust the balance between domestic and overseas manufacturingbases are now an important issue for the future of Japanese automakers.
Figure 4-8 shows the trend of automobile import by region. The import shows a downward
trend as if to reflect sluggish domestic sales but has been on a considerably high level of roughly
300,000 units. By region, the import from Europe, the largest supplier, is decreasing, and so is theimport from Africa where European automakers have their manufacturing bases. European
manufacturers were probably affected directly by the inactive domestic sales in Japan.

Fig. 4-8

Trend of Japan’s automobile import by region

Asia/Middle East

EuropeNorth Americaof which the EUof which the U.S.

2002

12,636202,256

215,774

31,27534,533

2003

21,297

180,900

187,000

26,03628,521

2004

14,349206,099

208,022

26,59628,041

2005

17,962

192,083

192,134

23,48725,892

2006

34,436

177,039

177,088

21,70923,091

Middle andSouth America

AfricaOceania andothers

Total

2002

14,572

18,346

97295,958

2003

11,75240,200110

288,880

2004

8,248

37,102

119295,8812005

10,57944,885

114

291,566

2006

12,08642,39992

289,192

Source:Prepared based on the trade statistics of the Japan Tariff Association.

By contrast, Japan’s import from Asia and Middle East is increasing. This is mainly due to rising
import from South Korea and so-called “reimport” from overseas plants of Japanese automakers. As
for the latter, Japanese manufacturers started to introduce re-imported vehicles from Asia into thedomestic market around the Asian Financial Crisis that occurred in July 1997 but the sales of thesevehicles did not grow. There will be the need to watch if this trend will continue in the future. South
Korean-made vehicles did not succeed well in the Japanese market that is relatively severe. But
South Korean dealers are taking various steps to win over Japanese users, and attention should be
paid to whether they efforts will lead to an increase in their share in Japan in the years ahead.

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4. Transportation Machine Sector

4.1.2. Progress of globalization and the future of the automobile industry in JapanAs discussed thus far, the expansion of domestic four-wheeled vehicle production has a strong
tendency for rising export to support the slow growth of domestic sales, and reinforcing domestic
marketing has been one of the challenges Japanese automakers have to combat with. Meanwhile, theautomobile industry is rapidly globalizing, and the overseas manufacturing bases of Japanesemanufacturers are sharply increasing in region and number. While these overseas plants need toincrease their production or introduce products suited to the market so as to secure their share, it isalso important to maintain the operation of factories in Japan. Manufacturing sites in Japan not only
have the role to supply products to the domestic market but also serve, in most cases, as the bases ofactivities for assisting overseas plants. There were many cases where at the time when a new factorywould start operation or when a new model would be introduced, the workers at the overseas plant
were sent to Japan for necessary training, though this practice is said to decrease recently. In addition,in order to support the manufacturing activities of their overseas factory, Japanese automakers aredispatched many Japanese workers there and are making efforts to secure the same quality as inJapan. In this sense, too, the overseas plants are beyond the framework of simple manufacturingbases. Most of Japanese automakers concentrate their development site and do such activities as theintroduction of a new model and the final evaluation of parts in Japan. Thus, a variety of knowledge
and know-how are stored in Japan and are then supplied to overseas plants; this structure has notbeen changed very greatly. If continuing manufacturing activities leads to the acquisition andimprovement of new knowledge and know-how, it is considered that maintaining the production atdomestic plants will help Japanese manufacturers keep and strengthen their competitiveness in the
global market.
On the other hand, considering the situation of the stagnant domestic market and the fact that
because the Japanese market has matured, no rapid growth can be expected in the future, it isimportant how the manufacturing activities at domestic factories should be continued. This is alsosignificant not simply as the domestic problem of unemployment but also from the viewpoint of how
the Japanese automobile industry can continue to secure its advantage in global competition.
As the step aiming at the domestic market, the introduction of the products the meet the demandof the market is naturally important. Also important will be the so-called “product-oriented” strategy
of continuously introducing the products of a concept different from conventional ones, for which
new technology and know-how are adopted and thus changing the demand. To achieve this, themanufacturer will need to constantly brush up on their technology, etc., making it important for themto invest funds in this effort. Expenditure for research and development (R&D), including
fundamental studies, will become especially important. The ratio of R&D expenses to the sales ofJapanese automakers is relatively high at present. But the manufacturer whose R&D expenses are
not very great will have to face keen competition with manufacturers from newly industrializing
countries (NICs), such as South Korean ones. In such event, the automaker will need to plan thestrategies for competition completely different from those in the past, and it will be an important
thing where to secure the competitive advantage of Japanese automakers.

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4. Transportation Machine Sector

4.2

Two-wheeled vehicles

4.2.1. Supply and demand trend(1) Outline

Globally, the two-wheeled vehicle industry in Japan may be regarded as securing competitive
advantage as a whole. But a closer observation by region shows that there are some markets where itis hard to say that Japanese manufacturers have an overwhelming advantage as they are chased after
by company without foreign capital affiliations. Demand continues to fall in the domestic market,
which is difficult to expand greatly. In this circumstance, there are some cases where two-wheeledvehicle manufacturers have been forced to change their strategies, including the reorganization of
manufacturing bases. The present situation and future direction of the Japanese two-wheeled vehicle
manufacturers are outlined below.
(2) Situation of production and sales

Figure 4-9 shows the situation of production of two-wheeled vehicles by engine displacement.
As seen in this figure, the domestic production of two-wheeled vehicles has been on the decline. By
displacement, while the output of Type I motorbikes increased a little but almost leveled off, that ofType II motorbikes and light two-wheeled vehicles showed a decline.
By contrast, the production of small-sized two-wheeled vehicles continued to rise, suggestingthat the Japanese market continuously shifted to the products with higher value added. An importantfactor behind this situation is the fact that because the domestic two-wheeled vehicle market isalready a mature one and a global manufacture system has been constructed for models with smaller
displacement, Japanese manufacturers are not yet in a situation where they could compensate theirsmaller domestic sales by increasing the export of their products. Moreover, the import of part ofType I motorbikes have already been started and so the role of domestic plants is now only the
manufacture of part of products for the domestic market and that of high value added products.
Therefore, it is unlikely that domestic production will increase rapidly in the years ahead. But there
is a growing tendency for manufacturers to utilize domestic factories as the bases for the productionof scooter-type small-sized two-wheeled vehicles as these vehicles have widely diffused among
domestic users. It is considered that the widespread use of scooter-type small-sized two-wheelers has
prepared for the manufacture of higher value added products at domestic plants. There have beensome cases where European manufacturers introduced these scooter-type small-sized two-wheelers
into the local market. In Europe, there has long existed the scooter market and manufacturers havetended to increase the manufacture of larger models as the market is maturing. This may affect thedomestic production in Japan.

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4. Transportation Machine Sector

Fig. 4-9

Trend of domestic production of two-wheeled vehicles
by engine displacement

Type I motorbikes(up to 50cc), total

Type II motorbikes(51-125cc)

Light two-wheeledvehicles(126-250cc)

Small-sized twowheeled vehicles(251cc and up)

2002

588,956543,294

241,356

741,882

2,115,488

2003

458,072

376,800

235,499

760,534

1,830,905

2004

331,449

304,622

271,126

832,387

1,739,584

2005

298,549

260,343

279,274

953,419

1,791,585

306,246

149,868

276,043

1,039,229

1,771,386

2006
Source:Total

Prepared based on the data of the Japan Automobile Manufacturers Association.

Fig. 4-10

Trend of production of two-wheeled vehicles by manufacturer

Honda

Suzuki

YamahaKawasaki

Others

Total

2002

849,475

356,504

699,663

209,010836

2,115,488

2003

653,941

412,342554,858

208,752

1,012

1,830,905

2004

567,628

397,104

554,181

220,308363

1,739,584

2005

590,251

489,005

471,254240,648427

1,791,585

2006

546,418

523,408

452,561

248,538461

1,771,386

Source:Same as that for Fig. 4-9.

Figure 4-10 shows the trend of production of two-wheeled vehicles by manufacturer. As evident
from the figure, while the output of the two giants, Honda and Yamaha, has declined, that of Suzuki
and Kawasaki has been on the increase. Kawasaki does not make Type I motorbikes and so is notaffected very much by the situation of low value added products. The structure of the Japanese
two-wheeled vehicle industry has changed into the one where manufacturers should work to secure
profits from a small-sized pie available. In this sense, the expanding market for large-sized scooters
has an important meaning; as high hopes are placed on overseas markets, too, in the future, it isexpected that a competitive environment where manufactures introduce highly profitable products
one after another into the market will continue.
As noted earlier, lower domestic sales are considered to be one of the factors behind the falling
production in Japan. Figure 4-11 shows the situation of domestic sales of two-wheeled vehicles byengine displacement and indicates that the downward trend of sales has continued. By the type,while some improvements are seen for Type I motorbikes, the sales of Type II motorbikes and lighttwo-wheeled vehicles dropped in 2006 again after they grew a bit in 2005. By contrast, small-sized
two-wheeled vehicles have continued to record increased sales since 2004, bringing a beam of hopein the generally inactive two-wheeler market. This is probably because the market of scooter-type
two-wheelers has been established as stated above and also because demand for the two-wheelers
has gone up due to their simple automatic transmission.
Yet the sales of Type I motorbikes, whose production is much higher than other types, continue
to fall, though they roughly leveled off from 2005 to 2006. With declining birth rates, the populationof young people, who have supported the sales of this type, is decreasing; this suggests an absolutedecline in the users who would buy this type newly. As if to evidence this, the average age of Type I

96

4. Transportation Machine Sector

motorbike buyers is on the rise, and the market is centered on replacement demand. These facts are
great hindrances to the growth of the two-wheeler market.

Fig. 4-11

Trend of the domestic sales and shipment of two-wheeled vehicles
by engine displacement

Type I motorbikes(up to 50cc), total

Type II motorbikes(51-125cc)

Light two-wheeledvehicles(126-250cc)

Small-sized twowheeled vehicles(251cc and up)

2002

535,327

94,46894,41446,873771,0822003

539,61089,906

87,88142,724760,1212004

500,388

62,78097,13539,718700,0212005

470,92288,74799,65847,186

706,513

2006

478,196

82,211

91,39548,564700,366

Source:

Total

Same as that for Fig. 4-9.

Fig. 4-12

Trend of export of two-wheeled vehicles by region andengine displacement(10,000 units)
70
60
50
40
30
20
10

Asia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Asia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Asia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Asia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Asia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania

0

2002

2003

2004

Ty pe I motorbikes (up to 50cc)
Light two-wheeled v ehicles (126-250cc)

Source:

2005

2006

Ty pe II motorbikes (51-125cc)
Small-sized two-wheeled v ehicles (251cc and up)

Same as that for Fig. 4-9.

(3) Situation of export and import

Fig. 4-12 shows the trend of export of two-wheeled vehicles by region and engine displacement.
As seen in this figure, North America and Europe have far greater figures than other regions, andsmall-sized two-wheeled vehicles account for almost all of the export. By region, the export to Asia
has rapidly gone down recently. This indicates that the production at the local manufacturing basesin Asia has been well under way and has reached a level where import from Japan is no longer97

4. Transportation Machine Sector

needed. A similar tendency is observed for South America and Africa. In Middle East, SouthAmerica and Africa, increasing import from Asia, etc. instead of Japan has contributed to thedeclining export from Japan. No great change is seen in the export to North America and Europe.
However, by displacement, the export of light two-wheeled vehicles and lower grade products isgoing down, whereas that of small-sized two-wheeled vehicles is growing in a way that makes up
the decline of light two-wheeled and lower engine displacement vehicles. This is probably because
the export of light two-wheelers and lower value added products from Japan has been shifted to thatfrom manufacturing bases in Asia and other regions.
These facts indicate that the two-wheeler supply system has been divided in the manufacturingbases in the world: the figure’s data show that while plants in Japan serve as the bases for supplying
the products with high value added and larger engine displacement to the global market, factories in
Asia and other regions globally provide other two-wheelers with lower displacement. In other words,
the data prove that the overseas manufacturing bases of Japanese two-wheeler manufacturers mainlyin Asia have already attained global-level quality and are now playing the role as the global suppliersof small-sized two-wheelers and that the division of global two-wheeler supply systems, mainly inJapan, has almost been completed.

Fig. 4-13

Trend of import of two-wheeled vehicles by region and engine
displacement(10,000 units)
40
35
30
25
20
15
10
5

2002

2004
50~250cc

250cc~500cc

2005
500~800cc

AfricaOceaniaSouth America

EuropeNorth/Middle America

Asia/Middle East

AfricaOceaniaSouth America

EuropeNorth/Middle America

Asia/Middle East

AfricaOceaniaSouth America

EuropeNorth/Middle America

Asia/Middle East

AfricaOceania

2003
~50cc

Source:South America

EuropeNorth/Middle America

Asia/Middle East

AfricaOceaniaSouth America

EuropeNorth/Middle America

Asia/Middle East

02006
800cc~

Prepared based on the statistical data of the Japan Tariff Association.

Figure 4-13 shows the trend of import of two-wheeled vehicles by region and engine
displacement. As evident from this figure, Japan’s two-wheeler import is almost all that of productsof 50cc or less, i.e., Type I motorbikes, from Asia. This means that Japan imports roughly the same98

4. Transportation Machine Sector

number of two-wheelers as its domestic production from Asia. Because there has been no greatchange in the level of import in recent years, it is supposed that the practice of procuring low value
added products of Type I motorbikes mostly from Asia has been established, which also causes one
to suppose that the supply system has been divided as stated above.
As discussed thus far, the global supply system of two-wheelers has been divided as a result of
the downward trend of the domestic market and according to product characteristics, and thistendency is likely to increase in the future. Thus, as the domestic market is slowing down and theexport has reached a limit resulting from expanding overseas production, domestic manufacturingbases will continue to live in the structure where they have to work to generate their earnings from asmall-size pie by making high value added products.

4.2.2. Progress of globalization and the role of domestic manufacturing bases

As stated so far, in the field of two-wheeled vehicles, the global supply bases, including Japan,
have been divided between product categories. More specifically, while high value added products
for the advanced market in Japan, the U.S. and Europe are supplied mainly by Japan, products withlow value added are provided by the overseas bases of Japanese manufacturers in Asia and otherregions. In this sense, two-wheelers seem to have followed a flying goose pattern more than othertypes of products. In the market of developing countries, two-wheelers are now used mainly for themeans for commuting. In most cases, the price is on a level where the middle class can buy on credit,
and two-wheelers of about 100-150cc are hot-selling products in this market. As a result, when the
manufacture is shifted to overseas, the products already developed and made in Japan are transferred
for local production with some adaptation, if any, in virtually all cases. This means that no importantconcepts, such as new technology, will not be necessary and only minor improvements in theexisting technology, etc. is enough when introducing a new model into the overseas market. Thus,
the transfer of manufacturing bases to overseas may be easier to do than in the case of four-wheeledvehicles. In this sense, the structure of division of the global supply system according to productcategories at present still has the traditional flying goose pattern of the shift of manufacturing bases
to overseas that the machine industry used to follow.
When transferring manufacturing functions to overseas in this structure, the method of moving
the existing technology and know-how to the manufacturing base abroad as they are andconcentrating development tasks in Japan will be able to be continued long. But if the existing
technology and know-how are transferred to overseas as they are, there is the possibility that none ofsuch transferred technology and know-how remains in Japan. Building the divided supply system
based on product characteristics may create the products no longer made domestically. If
development functions are concentrated in Japan and technology, know-how, etc. are supplied fromoverseas to Japan, that means that manufacturing process for verifying such technology, know-how,
etc. is not available in Japan, which may make it impossible to make full use of such informationfrom abroad. Moreover, domestic plants serve as the bases for supporting overseas manufacturingbases as their mother plants in most cases in Japan, and there are some cases where the products no99

4. Transportation Machine Sector

longer made in Japan are continued to be produced abroad. Thus, some of the Japanese engineers
sent to the overseas plant may have no experience in the manufacture of the product about which
they are expected to give advice; in this case, technical assistance at the overseas plant may behindered. Considering these problems, almost all of Japanese manufacturers are working to store up
their past technology, know-how, etc. and make their databases. For two-wheeled vehicles, while
domestic demand tends to dwindle, domestic manufacturing bases are beginning to be integrated.
Specifically, Honda had decided to move its two-wheeler plant in Hamamatsu to Kumamoto,concentrate domestic production and functions for global support in Kumamoto and operate its
center in Kumamoto more effectively as the base of two-wheeler production. This suggests that thecompany’s domestic plants still play an important role in its global production network; while thecompany retains its development functions in Japan, its domestic plants probably have come to playa more important part as the leaders of global manufacturing bases though they still serve as
manufacturing sites, too. In fact, when a manufacturing base in the developing country tries to copewith some change in the marker or environmental problems or to adopt parts with higher value
added, it has no domestic supplier of necessary materials and has to get them from Japan or the
supply center of a neighboring country. Meanwhile, as evident from the cases in China, India, etc., acompany without foreign capital affiliations often holds a relatively large share of the domestic
two-wheeler market. In this situation, price competition intensifies in the market in most cases, andJapanese manufacturers cannot get competitive advantage very easily only by superior technology
and quality. In such a circumstance, overseas manufacturing bases still tend to rely on their Japanesecounterparts as to, among others, the evaluation of local suppliers. Thus, the role of Japanese plants
should play remains important not only in improving cost competitiveness but also in introducing
new technology, etc.
For domestic manufacturing bases, the divided global supply system has been established.
However, domestic plants are expected to play the part not merely as the supply base of high value
added products but also as the organization for global support. In light of this, they still need to store
up and improve the technology, know-how, etc. on low value added products and to do so, they haveto continue the manufacture of these products.

4.3

Aircraft

4.3.1. Supply and demand trend(1) Outline

According to the quick report announced in February 2007, the production of aircraft in 2006
(calendar year) was ¥1,189.0 billion, marking an all-time high.
In July 2007, Boeing 787, the next-generation key medium-sized aircraft, was showed first at
Boeing’s Everette Plant. As of the end of July 2007, orders for this model reached as many as 683
units. Japanese manufacturers take charge of 35% of the model’s airframe components, and demand
for aircraft will develop in a full scale in the months ahead.

100

4. Transportation Machine Sector

In Japan, in July 2007, the rollout ceremony of the P-X, next-generation fixed wing patrol plane,
and the C-X, next-generation air carrier, was simultaneously held at the Gifu Plant of Kawasaki
Heavy Industries, Ltd. The first products will be delivered to the Ministry of Defense by the end of
FY2008.
In June 2007, Mitsubishi Heavy Industries, Ltd. exhibited at the International Aircraft Show in
Paris the mockup of “MRJ,” next generation domestic regional jet passenger plane that the company
is developing and will enter service in 2012.
As noted, there were many events symbolizing the transitional period from the existing to newmodels in 2007. In answer to the demand for newly made aircraft, Japanese aircraft-related
businesses will reinforce their system for increased production.
(2) Trend of production

The results of production (sales) of the aircraft industry in FY20061 (Fig, 4-14) increased by
7.9% over the previous year to ¥1,138.8 billion. By product category, the output of airframes was¥682.3 billion or an increase of 9.1% y/y, engines, ¥330.4 billion, up 7.5% y/y and related appliances,¥126.1 billion, up 2.0% y/y.
(3) Trend of export and import

According to the customs clearance statistics, the total export of the engines, airframes,
components, etc. of aircraft in 2006 (calendar year) was ¥409.9 billion or an increase of 42.1% overthe previous year. The total import amounted to ¥1,036.9 billion, up 17.8% y/y (Fig. 4-15).
(4) Prospects

According to the survey conducted by the SJAC for its 28 member companies (Fig. 4-16), theestimated production for FY2007 was ¥1,117.0 billion or an increase of 1.6% y/y (¥17.7 billion).
By product category, the output of airframe-related products was estimated at ¥614.7 billion
due to higher production of airframe parts, that of engine-related products, ¥328.3 billion because ofboosted production of parts for export and that of equipment, ¥174.0 billion.
The estimated export in FY2007 was ¥535.4 billion reflecting the good performance of
airframe components for Boeing, etc.
By product category, the export of airframe-related products was estimated at ¥284.0 billion,
engines ¥225.3 billion and equipment ¥26.1 billion.

1

The figures are those prepared by the Society of Japanese Aerospace Companies (SJAC) based on themachinery statistics of the Ministry of Economy, Trade and Industry and are the sums of the amount of
production and that of repair costs.

101

4. Transportation Machine Sector

4.3.2. Results of operation and the trend of the aircraft industry(1) Situation of management

In May 2007, Mitsubishi Heavy Industries (MHI) shipped the main wings of compoundmaterials for the first Boeing 787 plane. Orders for 787 have already exceeded 680 units, and thecompany will reinforce its system of production increase of main wings in the future. As in theprevious year, MHI enjoyed greater sales in the aerospace segment of ¥495.0 billion, up 11.0% y/y,in 2006. The company is also continuing R&D activities for the “MRJ,” next generation domestic
regional jet passenger plane, so as to decide the possibility of starting business for the plane in thespring of 2008; for example, MHI displayed the 1/20 mockup of the plane’s passenger cabin at theInternational Aircraft Show in Paris in 2007.
In July 2007, Kawasaki Heavy Industries (KHI) held the rollout of the next-generation fixed
wing patrol plane and next-generation air carrier for the Ministry of Defense. KHI also shipped front
bodies for the first 787 plane to Boeing in January 2007. The company achieved sales of ¥269.1
billion in the aircraft segment due mainly to higher sales of components for the 777.
Ishikawajima-Harima Heavy Industries Co. changed its corporate name into IHI Co. in July
2007. As a result of the reduction in the frontline equipment budget, the company is faced with adisadvantageous situation for demand for defense facilities. But in the private sector, IHI
successfully continued the development of the GEnx engine to be applied to Boeing’s
next-generation medium-sized airbuses and received orders for F110 engines, V2500, etc. from the
Ministry of Defense. As a result, the company registered sales of ¥297.9 billion in 2006.
Fuji Heavy Industries Ltd. (FHI) enjoyed good sales of combat helicopters and experimental
CX/PX planes in the defense equipment segment. FHI also achieved great sales of main wings for
Eclipse Aviation of the U.S. and center wings for Boeing 787 (those for the first 787 shipped in
January 2006). The company’s sales in FY2006 were ¥94.0 billion, an all-time high for the second
consecutive year.
In the private sector, Shinmeiwa Industries, Ltd. got orders for airframe components for a newpassenger place being developed and had steady demand for passenger planes and business jets, too.
In the defense sector, the company completed the manufacture of search-and-rescue amphibian
planes and the regular repair of various airplanes as planned. Shinmeiwa recorded sales of ¥24.6
billion in 2006.

102

4. Transportation Machine Sector

Fig. 4-14

Trend of aircraft production (fiscal year)

12,000Airframes

10,049Engines

10,0009,517

Related appliances
Aircraft, total

8,165

9,688
9,052

8,692
8,265

7,590

8,000

7,907

7,024
6,365 6,239

6,601

5,740

6,000

6,823

6,694
4,307

4,651

5,831

4,000
3,643

2,000

8,566 8,666 8,650

9,842

11,388
10,483

10,401
10,21910,065

3,977
3,473

3,809

4,065 4,191

2,686 2,808
767
854

4,916

6,221 6,238

5,888

5,391

5,948

6,190

5,251

4,916

3,057

3,304

2,538 2,446 2,453 2,538
2,322 2,406 2,251
2,029
1,728
1,656
1,630
1,261
1,548 1,456 1,460
1,490 1,555
1,380 1,348 1,236
1,694 1,754
1,645 1,523 1,484 1,574
1,202

1,909

2,068
1,956 1,799 1,834 1,770

1,506

19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06

0

1,5561,582 1,687
1,195
959 1,081
1,210 1,272
1,192 1,210
884 1,015

4,543

5,133 5,171 4,969

6,097

Source:Prepared based on the data of the SJAC.

Fig. 4-15

Export and import of aircraft in 2006

(calendar year)(¥ million)
ExportAircraft engines (pistons)
Parts for aircraft engines (pistons)
Aircraft engines (turbines, etc.)

Import
66

556

2,820

1,645

1,267

173,909

169,319

271,757

Gliders and hang gliders

6106

Balloons and airships

620

Parts for aircraft engines (turbines, etc.)

Aircraft with no engine

41

Helicopters, total

417

18,230Empty weight: 2,000kg or less

148

3,972

Empty weight: over 2,000kg

269

14,25875

375,278

Aircraft and other airplanes, total
Empty weight: 2,000kg or less

54

1,133

Empty weight: over 2,000kg but 15,000kg or less21

15,953Empty weight: over 15,000kg

358,192

Components, total

235,332

Aircraft propellers

187,515
1,037

Helicopter rotors (including blades)

2,218

Propellers and rotors and their components (excluding helicopter rotors)

771

3,404

228,700

154,455

Landing devices and other components

3,823

21,277

Others

1,982

5,124

20

872

36

6,660

409,922

1,036,872

Other components for aircraft or helicopters
Components for balloons, airships and gliders

Parachutes and rotochutes and their components
Aircraft catapults, arresting gears and other similar devices and their components
Aircraft training devices and their components
Total

Source:Prepared based on the data of the SJAC.

103

303

4. Transportation Machine Sector

Fig. 4-16

Prospects for the production and export of aircraft in FY2007
Production (¥ million)

Export (¥ million)

Results in
FY2005Results in
FY2006

Estimate for
FY2007

Bodies196,288

179,092

169,491Parts

399,702445,849445,201

Sub-total

595,990624,941

Bodies74,75173,555

Parts

228,022

253,308

259,673

Sub-total

Airframes

EnginesResults in
FY2005Results in
FY2006

Estimate for
FY2007

Bodies

67

77

0

Parts

181,175

254,089

284,010614,692

Sub-total

181,242

254,166

284,010

68,625

Bodies17,803

26,94526,800Parts

160,712

190,839

198,491

Sub-total

225,291

Airframes

Engines

302,773

326,863

328,298

178,515

217,784

Equipment

134,846

147,524

174,025

Equipment

22,07021,402

26,097

Total

1,033,609

1,099,328

1,117,015

Total

381,827

493,352

535,398

Source:The SJAC, “Prospects for Production, Export and Orders of Aircraft (May 2007).”

Fig. 4-17

Financial situation of the five aircraft industries (consolidated)¥100 million, %As ofMar. ’02

As ofMar. ’03

As ofMar. ’04

As ofMar. ’05

As ofMar. ’06

As ofMar. ’07

28,63925,93823,73425,90727,92130,685

9.9%

4,720

5,067

3,922

4,079

4,459

4,950

11.0%

Operating profit

786

1,153

666

147

709

1,089

53.6%

Ordinary profit

679

781

297

125

503

830

65.0%

Operation profit to sales ratio

2.7%

4.4%

2.8%

0.6%

2.5%

3.5%

-

11,445

12,395

11,602

12,415

13,224

14,386

8.8%

1,610

1,548

1,737

1,882

2,185

2,691

23.2%

313

305

222

247

417

691

65.7%
59.1%

Mitsubishi Heavy Sales
Industriesof which the aerospace segment

Kawasaki Heavy
Industries

Sales
of which the aerospace segment
Operating profit

IshikawajimaHarima Heavy
Industries (IHI)

Fuji Heavy
Industries

Ordinary profit

142

162

121

210

308

490

Operation profit to sales ratio

2.7%

2.5%

1.9%

2.0%

3.2%

4.8%

-

10,824

10,19010,474

10,89011,271

12,349

9.6%

2,329

2,438

2,414

2,383

2,695

2,979

10.5%

272

246

-232

106

218

246

12.8%
35.2%

Sales
of which the aerospace segment
Operating profit
Ordinary profit

187

96

-424

42

159

215

Operation profit to sales ratio

2.5%

2.4%

-2.2%

1.0%

1.9%

2.0%

-

13,624

13,723

14,394

14,464

14,764

14,948

1.2%

Salesof which the aerospace segment
Operating profit

Shinmeiwa
Industries

663

630

566

595

818

940

14.9%

884

675

503

420

583

479

-17.8%-9.8%

Ordinary profit

782

585

566

435

468

422

Operation profit to sales ratio

6.5%

4.9%

3.5%

2.9%

3.9%

3.2%

-

Sales

1,422

1,395

1,306

1,279

1,297

1,445

11.4%

339

385

288

208

207

246

18.8%

Operating profitof which the aerospace segment

28

32

64

60

49

53

8.2%

Ordinary profit

19

24

59

61

52

54

3.8%

2.0%

2.3%

4.9%

4.7%

3.8%

3.7%

-

Operation profit to sales ratio

Source:Year-on-year
ratio

Prepared based on the quick reports on the settlement of accounts of these companies, etc.

The manufacturers of materials for passenger planes, such as Boeing 787, and related
businesses generally registered greater sales over the previous year (Fig. 4-18). Considering thesituation of orders for Boeing 787, these manufacturers will continue their system for production
increases.

104

4. Transportation Machine Sector

Fig. 4-18

Financial situation of aircraft equipment manufacturers
Sales of the segments, including aircraft(¥100 million)
FY2006Year-on-year ratio

Consolidated sales(¥ 100 million)

FY2005

Segment sales toconsolidated sales
ratio

Toray Industries

686

527

30.1%

15,465

4.4%

Toho Tenax

340

289

17.7%

485

70.2%

Mitsubishi Rayon

1,115

931

19.8%

4,170

26.7%

Yokohama Rubber

1,247

1,162

7.3%

4,974

25.1%

Nabtesco Corp.

500

396

26.4%

1,614

31.0%

Sumitomo Precision Products

219

199

9.8%

502

43.7%

Nikkiso

313

259

21.1%

654

47.9%

Koito Industries

265

183

44.7%

558

47.4%

Japan Aviation Electronics
Industry

155

128

21.1%

1,376

11.3%

Kayaba Industry

60

58

2.4%

3,561

1.7%

Koito Mfg.

31

28

11.1%

4,525

0.7%

Showa Aircraft Industry

92

76

20.5%

252

36.4%

Jamco Corp.

417

319

30.7%

417

100.0%

Shimadzu Corp.

570

525

8.7%

2,624

21.7%

Source:Prepared based on the quick reports on the settlement of accounts of these companies, etc.

(2) Future prospects and problems

As the rollout of Boeing 787 was held and the production of the new model will be increased ina full scale in the months ahead, Japanese partner businesses will need to reinforce their production
increase system. This situation has offered chances for business with these partners to domestic
small businesses, etc. Some companies have already entered in the metal working field.
Tier 1 businesses (primary suppliers) have been able to meet their business needs only withexisting suppliers, and it is said that they have had not much interest in getting new supplier partners.
But in the recent situation where it has become an urgent problem to establish a production increasesystem, it seems that they recognize the need to find new motivated partners having technologicalpower and to secure new suppliers. Meetings for studying the possibility of entering the field of the
new aircraft model, existing planes, engines, equipment, maintenance and others and attempts at
joint order acquisition have already been held and made in such areas as Okayama, Osaka,
Kanagawa, Tokyo and Suwa. According to the moves of Tier 1 businesses, activities for forming
networks and cooperation mechanisms among areas and small businesses may increase further in the
future. To these small businesses, obtaining the certification of JIS Q 9100, the quality management
system for aerospace, and other standards, in addition to investment in the latest equipment, etc., willbe the keys to new business chances.
In the U.S. market of small-sized aircraft, Honda Motor Co. exhibited, in July 2006, HondaJet,
its small-sized business jet, at the “Air Venture 2006,” and announced a business plan tomass-manufacture the model and newly enter the small-sized aircraft market. In August 2006, thecompany also published the foundation of Honda Aircraft Company, its wholly-owned subsidiarythat will do the development, manufacture and sale of airframes. In the fall of 2006, Honda started toaccept orders for HondaJet, the mass-manufacture model, and has already received orders for over
100 units. The company will obtain an approval for the mass production model in three to four years

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and will then start the mass manufacture. It plans to deliver the first HondaJet by the end of 2010.
Honda will enter into a business tie-up on the sales and service network with a U.S. aircraft
manufacturer so as to meet customer needs on a high level, and attention should be paid to thecompany’s movements in the future.

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