Kei Cars

by Kensatsukan Gaijin

The Toyota Corolla is the world’s best selling car, and the Toyota Camry and Honda Accord are the best selling cars in the United States.  You’d think that those cars dominate the roads in Japan, too - but you’d be wrong.  OK, maybe I’m exaggerating, but the Kei Jidosha (軽自動車), or light vehicles, are a category of cars, trucks and vans that dominate Japanese roads in both cities and rural areas, yet are virtually unknown outside of Japan.  40% of all cars sold in Japan are Kei cars, and in some regions between 75% and 100% of all households own at least one Kei car.  Daihatsu, Honda, Mitsubishi, and Suzuki all manufacture kei cars, which are easy to spot due to their yellow license plates.  To fall into the Kei class, a car can be no more than 11.1-feet long, 4.6-feet wide, and 6.5-feet high, with a 660 cc engine.  These tiny vehicles are a vital part of the Japanese economy, but safety and export rules keep them out of the US and Europe.  


Japanese automakers produce more than 50 models of Kei car, and Kei cars also typically get 40 to 60 mpg — which is another reason they’re so popular.  Gasoline costs $5.79 a gallon in Japan.  In a survey published in April by the Japan Automobile Manufacturers Association, 26 percent of drivers said they'd downsized from a regular vehicle to a kei--looking to cut costs. Last year, kei cars made up 40 percent of the new car market in Japan, and over half of cars on Japan's roads are believed to be kei cars.


The Kei car began as an initiative to literally get Japan moving after WWII, when most Japanese could not afford a full-sized car, yet had enough money to buy a motorcycle. To promote the growth of the car industry, as well as to offer an alternative delivery method to small business and shop owners, kei car standards were created.  Originally limited to a mere 150 cc (100 cc for two-strokes) in 1949, dimensions and engine size limitations were gradually increased.   The Kei tax discounts, created more than half a century ago, still offer Japanese consumers significant advantages.  First, the taxable amount is only 3% of the purchase price, compared to 5% for a larger car.  Second, the weight tax amount is 13,200 and 8,800 yen for a three and two year period respectively; as compared to the 18,900 and 12,600 yen charged for larger size passenger cars. The savings are thus more than 30% in both cases. This weight tax is paid after the vehicle has passed its safety inspection.  Lastly, a 24-month insurance contract typically costs 18,980 yen at the time of registration, versus 22,470 yen for a larger car.


Still, the vehicles are a challenge for the Abe government, which is considering ending the subsidies for these tiny vehicles.  Development of the vehicles does virtually nothing to improve Japanese exports, since the vehicles are rarely sold overseas.  The subsidy also cuts into sales of regular cars, hurting Japanese automakers at home.  Searching for ways to increase revenue, the Abe government has proposed cutting back on or ending the Kei subsidies.  However, there has been considerable outcry, as the Kei cars are still vital to small businesses, farmers, and families.  20% of households surveyed in April stated that if the Kei subsidies ended, they would give up having an automobile entirely.