## ② Initiatives towards the complete privatization of Japan Railways

The individual companies of Japan Railways incorporated upon breakup and privatization of Japan National Railways in April 1987 have carried on their respective management efforts to meet their own regional conditions and management climates over the following more than 25 years. In the meantime, East Japan Railway Company, Central Japan Railway Company and West Japan Railway Company were completely privatized when the sale of the capital holdings of Japan Railway Construction, Transport and Technology Agency (JRTT) completed, but measures have been taken for the time being to keep the Japan Railways companies in mutual partnership and collaboration, assure user convenience, care for smaller enterprises and so on in consideration of the background of the Japan Railways reform.

Hokkaido Railway Company, Shikoku Railway Company, Kyushu Railway Company and Japan Freight Railway Company, on the other hand, carry on their respective efforts to increase revenues and cut costs. In the light of the social significance of the roles these companies play, such as securing means of local transportation and driving railway freight transportation having low environmental loads, necessary aids have been extended to them to reinforce their management structure and thus make them economically viable by leveraging funds from the JRTT Special Services Account since FY2011 in accordance with the Act on Treatment of Debt, etc. of JNR Settlement Corporation, in addition to the fixed property tax breaks already in effect.

## (2) Railway vehicle industry

The volumes of newly built railway vehicles and railway vehicle components (such as power generators and carriages) by value moved flatwise for domestic shipment and varied depending on the status of orders for overseas shipment. In FY2011, a 177.8 billion worth of 1,807 new vehicles was manufactured, when compared with a 272 billion yen worth of railway vehicle components. Newly built passenger vehicles

By component ratio, newly built railway vehicles manufactured commanded 96.3% by value for domestic shipment and 3.7% for overseas shipment, down 11.0% and 69.6%, respectively, from FY2010.

They were bound for the U.S., Taiwan and Egypt. Railway vehicle builders are working in coordination with railway operators to develop vehicles that fill various social needs, such as speed, safety and passenger comfort, plus lower noise and barrier-free design. Vehicle builders also pursue cost reductions by removing manual labor from design work and propelling the widespread use of standard parts with reference to Guidelines for the Standard Specifications of Commuting and Suburban Trains, which focuses on the value of basic designs and component sharing.

## Trends in Motor Truck Transportation Business and Measures

(1) Passenger car transportation business

## ① Motor bus business

Demand for motor bus transportation, which is represented by the number of passengers carried and operating revenues, remained on the decline in pace with changes in the urban structure, such as a hollowing of the central area of a city, and increased ownership of private cars with the progress of motorization. While business activity remains sluggish, the climate surrounding the motor bus business remains extremely harsh.

Changes in the Number of Passengers Carried by Motor Buses and Operating Revenues Graphic II-6-3-1

(Note) 1 Numeric data presented is based on the data on bus operators maintaining a fleet of 30 or more motor buses. Values in parentheses for a fiscal year indicate the total number of bus operators having a fleet of 30 or more vehicles for that fiscal year.

2 The three major metropolitan areas represent aggregate values from Saitama, Chiba, Tokyo, Kanagawa, Aichi, Mie, Gifu, Osaka, Kyoto and Hyogo.

Source) MLIT