### b. 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 volume of newly built railway vehicles by value moved flatwise for domestic shipment and varied depending on the status of orders for overseas shipment. Production by value in FY2012 stood at 168.4 billion yen (1,589 vehicles), with domestic shipments accounting for 89.0% (149.9 billion yen) and exports 11.0% (18.5 billion yen), down 12.5% and up 281.2% from a year earlier, respectively.

Production of railway vehicle parts (such as power generators and boggies) was 235.1 billion yen by value, that of signalling systems (such as automatic train control devices and electrical interlocking systems) was 130.5 billion yen.

Rolling stock builders and others are working to develop rolling stocks that fill diverse social needs, such as speed, safety, passenger comfort, low noise and being barrier-free, by partnering with railway operators and also to set up and even expand local production and service sites in the U.S., U.K. and elsewhere with the recent order taking for overseas projects as an impetus.

## 2 Trends in Motor Truck Transport Business and Measures

## (1) Passenger vehicle transport business

### a. 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.

Figure II-6-3-1

(Notes) 1 Numeric data above has been collected from the bus operators who own a fleet at least 30 motor buses. The parenthesized value for each fiscal year denotes the total number of bus operators who own a fleet at least 30 buses for that fiscal year.