Section 2. Motorization and Liberalization of Trade and Capital

Item 1. The High Rate of Economic Growth and Motorization

From 1955 to 1970, the Japanese economy achieved a high growth rate, the likes of which the world had never before seen. During those 15 years, while the average annual nominal economic growth rates of other advanced nations were between 6 and 10 percent, Japan's reached 15 percent. Consequently, Japan surpassed other advanced nations one after another in terms of gross national product (GNP), and beginning in 1969 became an economic power, ranking second behind the United States among capitalist nations. In terms of real GNP as well, the Japanese economy grew by 10 percent during these 15 years, increasing by 4.4 times.1

The steady rise in people's income accompanying this economic growth brought about a rapid expansion of personal consumption. After the "three sacred treasures" (a television, refrigerator, and washing machine) had been installed in most Japanese homes, the so-called "3Cs", i.e., the three large-size durable consumption items (the car, air conditioner, and color TV), became the new objects of ordinary citizens' desire. For cars in particular, the many economy passenger cars in the 1,000-cc class introduced by the various automakers in the mid-1960s, gave rise to a boom in private car ownership.

As the Japanese economy expanded, the number of cars sold surged. The demand for passenger cars in particular grew rapidly, and the sales volume achieved an average annual growth rate of 32 percent, jumping from 590,000 units in 1965 to 2.37 million in 1970. The number of privately owned cars in Japan grew from 6.3 million in 1965 to more than 10 million in 1967, making cars ubiquitous throughout Japan.

Japan's car production volume also increased from 1.88 million units in 1965 to 3.15 million in 1967, helping Japan surpass West Germany to become the second-largest car-producing nation in the world. In 1968, Japan produced more than 4 million units.

Against this backdrop of progress in motorization, the road infrastructure in Japan was also improved. Following the Road Improvement Five-Year Plan, which was started in 1954, a fourth plan and fifth plan were implemented in the second half of the 1960s, gradually improving Japan's road infrastructure. Furthermore, in 1954 the Meishin Expressway (linking Nagoya and Osaka) was opened, marking the arrival of the highway era. Then in 1969, the Tomei Expressway (linking Nagoya and Tokyo) was completed.

In the second half of the 1960s, as cars also became popular among working families and self-employed people, compact economy passenger cars and compact trucks began to account for a large share of the market. Cars transformed from items that symbolized economic status into comfortable tools that could be easily purchased and driven by anybody.

Additionally, the generation of people born during the postwar baby boom began to emerge as a major demand factor in the car market. For them, cars were fashionable tools closely linked to their lifestyles and expressed their individualism. In addition to traditional family cars, stylish hardtops (passenger cars without roof-supporting center pillars) and coupes also began to attract more buyers. Demand for sporty cars possessing high performance factors such as high-speed stability and fast acceleration increased as well.

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