markets. Figures 1 and 2 show changes of shares by mode from 1950 to 1991 for passenger and freight transport. In these figures shares are calculated on passenger kilometers and ton kilometers respectively. Note that Figures 1 and 2 are only for domestic traffic.

For passenger transport, in 1991 about 50 percent of total passenger travels were made by private passenger cars, while the share of railways was about 35 percent. In Japan, railways consist of Japan Railway Companies (JRs) and other private and municipal companies. The total number of railway companies is 184. This seems to be the biggest number of railway companies in the world. JRs were established by division and privatization of Japanese National Railways (JNR), and consist of six passenger railway companies and one freight railway company. Of the remaining 15 percent, bus and taxi services occupy about 10 percent, the remaining 5 percent is by air transport. If we sum up shares of private passenger cars and of bus and taxi services as a category of road passenger transport, two-thirds of total trips were made by road passenger transport.

Modal splits of passenger transport changed greatly in these 40 years. In 1950, just after World War II, the share of railways was extremely large (as much as 90 percent), and dominance of railways lasted until the mid-1960s. In 1965, railways' share (sum of JNR and other railways) counted for 67 percent, which is same as recent share of the road passenger transports. After that, the railways continually lost share. In 1970, the share was about 45 percent, and it dropped below 40 percent in 1980. Recently, it stays around 35 percent.

The main reason why railways lost their share during 1960s and 70s is that passenger car transport grew very rapidly in this period. In 1965, the total number of motor vehicles owned in Japan, including trucks, busses as well as passenger cars, was about 8.12 million. During the next ten years, this number increased to 29.14 million (average growth rate was 13.6 percent!!). Especially, the number of private passenger cars owned increased dramatically. In 1965, the number of cars was two-thirds that of trucks, but ten years later, the number of passenger cars doubled that of trucks. Thus these ten years are called “the era of private passenger cars” in Japan.

We can see the same tendency in changes of freight transport. In freight transport, the share of railways was more than 50 percent in 1955. That figure dropped to around 30 percent in 1965; railways lost 13 percentage points from 1965 to 75. This means that we could find the turning point of the typical pattern in freight transport during these years. In recent years, the privatized JR Cargo company has been struggling to extend its share, and as a result, the share is relatively stable.

In 1991, about an half of freight was transported by trucks (sum of operating carriers and private trucks), while about 45 percent was by coastal shipping. The share of railways was only 5 percent. As we can see from Figure 2, the share of coastal shipping remained stable in these forty years, and the truck extended its share by depriving railways of traffic. Since freights for coastal shipping are limited to bulky and heavy cargo, competition occurred between railways and trucking.