Car makers dent deregulation: Plans to simplify Japan's system of car inspections hit a brick wall when the head of Toyota said 'not in my back yard'. Terry McCarthy reports from Tokyo

The 'not in my back yard' syndrome has found its way into Japan's struggling car industry of late - most notably in the person of Shoichiro Toyoda, the chairman of Toyota Motor Corporation.

The car industry is one of a host of businesses in Japan facing calls for some sort of deregulation. But cars, the symbol of Japan's economic might and export power, rate highly in the nation's consciousness.

Mr Toyoda has spent his entire career building on the might of Toyota. But when Akio Morita, chairman of Sony, suffered a stroke last year, Mr Toyoda found himself unexpectedly in line to take over as head of the influential Keidanren (Japan Federation of Economic Organisations). This is the most respected business organisation in Japan, and carries great weight in negotiations with the government and the often intractable bureaucracy.

The position of chairman of Keidanren has become more important as calls for deregulation of business have become more insistent. Mr Morita, respected internationally and one of the first senior Japanese business leaders to urge his country to modify its economic habits, had been earmarked for the job after the term of Gaishi Hiraiwa, the last incumbent.

But a few fragile blood vessels changed history, and Mr Toyoda found himself in the limelight. A man known more for his behind-the- scenes consensus building than for visionary management dazzle, he has not visibly warmed to his new job. In the interviews he has given so far, he has read carefully composed answers to pre-submitted questions, containing the all-too-familiar platitudes about the need for deregulation in the economy, for more transparency in import restrictions, and for an enhancement of Japan's role in a 'global partnership'.

Last month, however, Mr Toyoda did a nimby. He told journalists he was against a revision of Japan's system of mandatory car inspections, despite its heavy cost and inconvenience for consumers.

His comments, seen as a blatant sop to the car industry and the car maintenance service centres around the country, caused a storm of protest. But although he later said his comments were misunderstood, it was already clear that the chances of speedy deregulation were low.

The car industry in Japan is not in good shape. Sales are down - domestic demand fell by 7 per cent to 6.4 million units in the year to March, the third consecutive year of falling sales. Exports are also falling - by 18 per cent last year, because of the high yen and a relocation of car plants outside Japan. The car companies, who all over- expanded during the bubble years, are now finding they have huge over-capacity: analysts calculate that Nissan is only using 64 per cent of its factory capacity in Japan. So any change that might further hit sales is hardly welcome to the industry.

All cars in Japan must be inspected three years after they have been sold new, and every two years after that. If they reach 11 years of age, cars must be inspected every year. These inspections cost about Y125,000 ( pounds 780) each. The Transport Ministry also requires smaller checks every six months, costing an average of Y25,000 ( pounds 156). There is no fine for missing the six-month tests, but neglecting them can have effects on insurance rates and resale values.

The car industry has been a staunch supporter of the inspection system ('shaker' in Japanese), since its high cost acts as an incentive for people to buy new cars after three or five years rather than pay for the inspection. And the 83,000 car maintenance centres around the country, which employ a total of 543,000 workers, are even more adamantly opposed to any change. Nearly 40 per cent of their business comes from these obligatory inspections, which frequently are little more than cursory checks requiring little or no mechanical intervention.

Last year the government proposed that the six-month checks should be eliminated, and that the larger tests should be simplified, reducing their costs to consumers. These changes were to take place in the summer of 1995. According to the Transport Ministry, the car servicing industry, which has an annual turnover of pounds 37.5bn, would lose some pounds 3bn if the inspection criteria were simplified as proposed. So the servicing centres teamed up with car manufacturers to stop the easing of the rules. And Mr Toyoda, official chief patron of deregulation in Japanese business, found himself saying 'not in my back yard'.

If the consumer and his car are not getting much official sympathy, the Transport Ministry has been putting its brains to work on behalf of businesses that need to move freight around the country and overseas. With Japan's road system already clogged and air freight expensive, the ministry has been co-ordinating a research project by a consortium of seven shipbuilders to design a high-speed cargo ship, which has been dubbed the 'techno superliner'.

The ship is being designed so that most of its hull would be above water, increasing its speed. According to the plans, the superliner would travel at 50 knots (about 60 miles per hour), could carry 1,000 tons of cargo, and would have a radius of about 600 miles. It could move freight from Japan to China in one day, from Japan to Taiwan in two days, and from Tokyo to northern or southern Japan in a matter of hours.

The Transport Ministry wants to see the ship operational by the year 2000, and although it is still in the developmental stage, a number of local governments are vying to have docking ports for the new ship.

Not to be outdone, the Construction Ministry has come up with its own solution to Japan's jammed highways: transport freight underground.

The bureaucrats in the big- spending ministry have come up with a multi-stage plan for underground, unmanned railways.

The first stage would link the 23 wards of Tokyo, and subsequent stages would tunnel between Tokyo and Osaka and possibly other big cities. According to the planners, the scheme is technically possible, and would take a large number of trucks off the road, reducing congestion and pollution and increasing distribution efficiency. All they need is the money. Sounds like it is time for a new election.

(Photograph omitted)