Patriotism is why Japan’s car industry progressed? Utter rubbish, here’s why

Patriotism, like religion, can be used both ways - a uniting force to achieve a greater good, or a convenient tool to elevate empty tin pots into positions of power.

Germany for example, hates talking about patriotism or even nationalism, because that was the platform abused by Hitler to come to power, suspending the Weimar Constitution under the pretext of defending the supremacy of the German race.

Instead of patriotism, German schools teach children to be loyal to shared German values rather than loyalty to the country and it makes a clear distinction between the two.

In a debate on the future of the Europe, German Chancellor Angela Merkel said to preserve peace, "Nationalism and egoism must never have a chance to flourish again in Europe. Tolerance and solidarity are our future. And this future is worth fighting for,” adding that Europeans need to see themselves as a community with a shared destiny rather than citizens of individual countries.

Closer to home, our schools history books are very superficial so every time a politician pulls out the patriotism (or racial-religious) card to rally for support, as opposed to solving immediate rice bowl-related issues, nobody shouts at him (or her) to shut up and sit down.

A common trope used to defend the lack of progress from our national car brands is that Malaysians are an unpatriotic lot and don’t support their domestic brands the way the Koreans or Japanese do.

Coincidentally, the people who say we should buy Malaysian are also the same people who go to the Istana Negara in Toyota Alphards and educate their children overseas.

Also read: Support Malaysian products, so why is the Toyota Alphard our gov's ‘official car’?

In 2014, the then Proton chairman Tan Sri Mohd Khamil Jamil lamented on the lack of support from Malaysians, telling the Business Times, “Look at the Japanese and how they are supporting their carmakers.”

This is a wrong understanding that needs to be corrected.

Japan once believed that taxpayers’ money is wasted on protecting Toyota

What if I tell you that in the early days of Japan’s car industry, not only did the the Japanese people not support their local brands, but demanded for protection of Nissan and Toyota from foreign competition to be removed?

Even in the difficult years immediately after the war, the founding families of Toyota group (Toyoda family) and Nissan group (Aikawa family) are one of the wealthiest industrialist families in Japan, and both families are related.

Nissan’s founder Yoshisuke Aikawa was the cousin of Toyota Motor’s founder Kiichiro Toyoda’s wife Hatako Iida, whose family co-founded the Takashimaya departmental store. However unlike the Toyoda family, the Aikawa family has no more ties with Nissan.

It is quite naïve to think that the common Japanese people struggling to scrape a living in the austere years after the bombings of Hiroshima and Nagasaki would care about enriching wealthy industrialist families and chose Japan-made products over cheaper and better quality foreign ones out of patriotism.

The fact is that Japanese taxi companies, who were the biggest car buyers at that time, hated Japanese cars. They wanted a Chevrolet or a Ford – the gold standard of cars in the ‘50s, but all they could afford to buy was either a Toyota or a Nissan (Honda hadn’t make cars then), no thanks to a 40 percent tax on foreign cars and import quotas limiting supply.

In the ‘50s, Toyota’s sedans were from the S series range – SA, SD, SF - all had the underpinnings of a small truck, which made them durable for poor roads of that time, but the ride was terrible, the cabin was cramped, quality was poor. Those early Toyota sedans were bad for business and taxi drivers hated it.

Taxi and logistic companies had been lobbying to the Ministry of Transport for years to get the government to remove the punitive 40 percent import tax.

There were loud complaints from the public that Japanese manufacturers were profiteering from the Japanese people. Because imports are limited by a quota and Japanese manufacturing capacity was too low to meet market demand, customers had to wait very long for their Japanese cars and dealers were charging twice the usual sales handling fee – sounds like Proton in the ‘90s?

Toyota summoned to explain why it should be protected from imports

In response to growing complaints, the Japanese Diet (equivalent to our Parliament) held an Upper House Committee on Transport hearing in July 1952.

It summoned all major Japanese car manufacturers and demanded an explanation on why should the government protect Japanese manufacturers from Western competition.

The grilling received by Toyota were detailed in Toyota’s archives and Masaaki Sato’s book ‘The Toyota Leaders – An Executive Guide.’

Taizo Ishida, then President of Toyota was asked by an assemblyman, “Isn’t it true that Japanese cars are expensive because Japanese carmakers are only concerned about profits? Consumers are annoyed at having to buy unreliable domestically produced cars built with inferior technology. Shouldn’t we therefore import more cars from abroad? Manufacturers’ are dependent on MITI’s protection for domestically built cars.”

Another asked, “I head that a certain car company is reaping landslide profits. Meanwhile, the performance of its cars hasn’t improved at all.”

Ishida responded, “No, we (Toyota) are making surprisingly little, much less than assembly members might think. But our cars are getting better with time.”

“Don’t bullshit me! According to what I’ve heard, aren’t you paying 100 percent dividends and rewarding your board members with million-Yen bonuses? It’s downright criminal that you’re living it up while you go around peddling jalopies. You’re making a mockery of the Japanese people!” shouted another assemblyman.

Annoyed by the accusations, Ishida defiantly said, “Gentlemen, maybe not right now, but I guarantee that one day every one of you will be a Toyota customer. As a businessman, I am not in a position to argue with my valuable future customers. Please allow me to say one thing, however. To what manufacturer in what country does the 100 percent dividend mentioned by this assemblyman refer to? At the very least, Toyota absolutely does not engage in such absurd behaviour. I’m sure there is no one in this business that does such a thing."

He added, “We are not in the business of making quality cars because we were asked to by the government – much less you gentlemen – to do it. To survive in the auto business, Toyota is working without rest to produce high quality cars that live up to international standards as fast as humanly possible. Somehow we’re making money, but we’re not raking it in. We’re trying to save money but we’re not loaded.”

Ishida would leave the session with a punch line that would shut everyone up:

"If it turns out that our technology cannot keep pace, I am ready to heed the criticisms we have heard today by giving up the idea of a Japanese-made vehicle.......we feel sure that, in the near future, the day will come when people will say that we did a decent job, and we look forward to that day."

What the assemblymen didn’t know was the burning determination that Ishida, a very loyal right-hand man of the Toyoda family, had already promised to realize the dying wish of two of his mentors – Toyota Motor’s founder Kiichiro Toyoda and his brother-in-law Risaburo Toyoda (Japanese customs allow for men to adopt their wife’s family name) – just months earlier.

Kiichiro died at a relatively young age of 57 years old, having literally worked himself to death. Kiichiro was found unconscious in his room with engineering drawings for engines strewn all over the floor. Doctors said he suffered a heart attack earlier.

The goal of making a ‘world class compact car with Japanese brains and skills’ was Kiichiro’s lifelong wish. However, he never got see the first real Toyota passenger car, not even the prototype.

Toyota was already selling sedans but in Kiichiro's mind, those early Toyota sedans built on truck chassis are a sham, a mere stop-gap measure. He wanted a real passenger car.

Why Kiichiro insisted on developing a Toyota car independently when Nissan had already partnered with Britain's Austin, Isuzu with Rootes (maker of the Sunbeam and Hillman, now no more), Hino – then yet to be part of Toyota - with France's Renault requires a separate post to adequately explain. His motivation and way of thinking had not been adequately covered by non-Japanese-language publications. Perhaps we will do it in the near future.

Two months after Kiichiro’s passing, Risaburo too died of a lung infection, aged 68.

In his final days on the hospital bed, Risaburo held the hands of Eiji Toyoda, Kiichiro’s cousin and Toyota’s No.2 engineer, and summoned what little energy his failing body had left and said, “Listen Eiji, no matter what happens with Toyota, you absolutely must make a success of the passenger car under development. That’s the only way to requite Kiichiro’s death.”

The man who had earlier opposed Kiichiro’s ‘foolish’ gamble with car manufacturing, is pleading to Eiji, on his deathbed, “Make sure these passenger cars happen even if it’s the last thing you do!”

Three years after Kiichiro and Risaburo's passing, the Toyota Crown was launched in 1955, Toyota's first true passenger car. 

Two years later, exports to USA started in 1957, it was a complete flop there as the little Crown couldn't handle America's big and higher speed highways, but it laid the groundwork for Toyota's eventual dominance. 

By 1966, Toyota Corolla was launched. The Corolla was designed by ex-aerospace engineer Tatsuo Hasegawa, and the rest is history as we know it today.

By the ‘80s, labour unions and domestic manufacturers in USA, Britain, and Europe were pleading to their respective governments to protect them from Toyota.

Today, domestic brands continue to dominate in Japan not because Japanese buyers are a patriotic lot, but because Japanese customers have very specific demands and only Japanese companies are listening enough to build products that meet Japanese requirements.

In 1996, Toyota sold the USA-built Chevrolet Cavalier as the Toyota Cavalier in Japan. Toyota had committed to sell 20,000 Cavaliers annually (part of a move to ease trade tensions between USA and Japan), in Toyota dealerships across Japan. As expected, it was a flop, proving that Japanese buyers don't blindly support any Japanese product, even if it has a Toyota badge on it.

Also, Japanese tight streets and odd tax structure that taxes cars based on amongst others, length and width, favour tiny ‘kei’ cars. Out of the 78 million cars in Japan, 38 million are kei cars.

Tight parking spots also means that sliding doors are preferred.

No European or American car company makes compact cars with sliding doors, so Japanese kei cars dominate. It's less about patriotism, but about meeting Japanese users' unique requirements.

Also read: Poor door choices are what killed off the Toyota Wish and Honda Stream

Japanese buyers also don’t care to ask about warranties. They expect the dealer to fix any problem (apart from wear and tear-related ones) free of charge so the cars can pass their first two mandatory ‘Shaken’ road worthiness inspection (third and fifth year of the car). This is not possible unless the product’s quality is very high.

All these quirky habits and unique usage conditions inevitably result in the image of Japanese buyers buying only Japanese cars out of patriotism, which is still true but if you probe further, you will find that the real reason is always related to features that match their needs, superior quality, and reasonable price.

The failure of Lexus to crack its home market proves that Japanese buyers don’t open their wallets for patriotism, but only for products that meet their requirements.

Also read: Lexus is not doing so well in Japan and it's all the Harrier and Alphard's fault

Even with the mighty Toyota’s resources, Japanese users still thumb their nose at a Lexus, because Lexus’ primary focus is to meet the needs of American and Chinese customers. Japanese buyers can tell that and they responded in kind.

So they buy either a Toyota Century or a Toyota Alphard (it's all about sliding doors, remember?), while status conscious individuals buy a left-hand drive Mercedes-Benz G-Class / S-Class, because imported left-hand drive cars are status symbols there.

All dealers of imported cars in Japan offer buyers the choice of either left- or right-hand drive configuration.

Japanese companies also tend to procure products or services from other Japanese companies. Again, this is often misunderstood as an act of patriotism but it’s actually because of Japanese keiretsu network - a uniquely Japanese informal alliance of companies with interlocking relationships, usually encouraged by an anchor bank. So Japanese companies tend to do business within their keiretsu network.

If for example Honda, which is financed by the Mitsubishi-UFJ Financial Group, which also owns about 1.5 percent of Honda, wants to build a facility in say the Philippines, Honda will naturally procure equipment or services from other Japanese companies that has ties with Mitsubishi-UFJ, who are operating there.

This way, Japanese companies move forward together and defend themselves from hostile takeovers by American giants. It’s an alliance built on shared values and interest, not patriotism.

Like everywhere in the world, in a struggle between wallet and ideology, the wallet always win. A patriotic call by our men in uniform is to be respected, but a patriotic call by an industrialist / politician who spends his own money on imports should be ignored.