My best wishes to all for a happy new year.

Japan's economy during the past year remained unstable, affected by, among other factors, yen appreciation, the advent of SARS, a high unemployment rate, and sluggish personal spending in an unusually cool summer. Some favorable signs nonetheless did emerge-notably, a stock market recovery and increased capital investment.

Against that background, the domestic market for passenger cars and commercial vehicles picked up in 2003 for the first time in three years. New model launches and a surge in large truck sales resulted in total passenger car and CV sales of 5.85 million units, up 1.0% over the previous year. Propelled by brisk shipments to Europe and Asia, exports totalled 4.75 million units, also up 1.0%. Motorcycle sales dropped 1.2% to 798,000 units, with 1.23 million units recorded in exports.

The Japanese economy in 2004 should experience some growth, reflecting sound economic conditions in the U.S., continued plant-and-equipment investment and steady personal spending, despite uncertainty regarding stock prices and currency rates. Domestic demand is thus likely to rise to 5.9 million units for passenger cars and CVs and to 800,000 units for motorcycles.

Although some economic indices are encouraging, the business climate for the automobile industry continues to pose considerable challenges. Nevertheless, we are convinced that the industry can develop further by providing consumers with attractive products that specifically meet their diverse needs.

For manufacturers, a major priority is to speed up efforts to incorporate advances in environmental protection and safety technologies in the vehicles they produce. The future of the industry on a global basis is largely dependent on such progress. In May 2003 JAMA introduced its "Future Measures for the Environment and Safety", whose stated goals it intends to meet as rapidly as it can.

Preventing global warming and improving air quality are pressing problems for all of humankind. The Japanese automobile industry is addressing these issues by, among other initiatives, developing and distributing vehicles that offer increased fuel economy and reduced emissions; encouraging the practical use of fuel-cell vehicles; promoting improved fuel quality; and ensuring that diesel vehicles comply with new, long-term emission regulations. In anticipation of Japan's enforcement of an automobile recycling law as of January 2005, the industry is also working with relevant government and private-sector organizations on the wide-ranging measures required to ensure compliance with this law.

Traffic fatalities in Japan have halved since their peak in 1970 and today are on a steady decline. Achieving greater safety on our roads requires not only advances in vehicle safety technologies and an enhanced road environment, but also increased awareness among the public at large. The Japanese automobile industry, for its part, will incorporate advanced, on-board vehicle safety features while continuing to promote, via a number of channels, greater public awareness of traffic safety and the comprehensive implementation of traffic safety-related measures. To the greatest extent possible, it will also contribute to the accomplishment of the government-stated objective of reducing present traffic fatality rates by a further 50% over the next ten years.

Issues related to globalization are another major concern. Current worldwide sales for Japanese automakers total about 12 million units, of which 7.7 million are produced overseas. Automobile manufacturing now being truly without borders, the industry must operate with maximum responsibility and effectiveness in the context of the international business environment.

With the new WTO round facing significant difficulties, many countries and regions-including the U.S., Europe, and Japan-are seeking to organize the competitive environment through the creation of free-trade areas, or FTAs. In Japan's case, the government is acting to launch negotiations aimed at establishing FTAs with South Korea and three ASEAN nations, and a Japan-China government/private-sector dialogue on the development of the automobile industry is scheduled to begin early this year. The Japanese automobile industry will also take an active role in promoting liberalization through FTAs as well as the building of constructive relationships that view Japan, China, South Korea and East Asia as an interrelated whole.

A parallel effort, the Global Automotive Industry Meeting, brings together industry leaders from Japan, the United States and Europe with the aim of presenting a common front on environmental and safety issues. Following the second Global Meeting for Passenger Cars held in 2003 at the Tokyo Motor Show, a second Commercial Vehicle Global Meeting will be held this autumn, also in conjunction with the show. These gatherings provide national industry organizations with the opportunity to increase mutual understanding through expanded face-to-face exchanges.

Of no less importance to vehicle manufacturers is the need to make automobile use more comfortable and more enjoyable.

There are now 77 million vehicles on the road in Japan, which is roughly 10% of the total number of automobiles in use worldwide. However, various measures should be taken to improve the status of vehicle ownership and use in this country. JAMA continues to appeal to the government for a reduction of the tax burden on vehicle users and a simplification of the complex auto tax system. It furthermore actively promotes measures to optimize road construction and road maintenance nationwide. Meanwhile, a broad range of IT-related systems and services are being adopted for the benefit of automobile users, including, for example, electronic toll collection, on-board telematics, a greater diffusion of assisted-mobility vehicles, the introduction of automatic transmission licenses for motorcycles, the relaxation of license requirements for handicapped drivers, and vehicle anti-theft measures.

Also upcoming on JAMA's agenda is its organization of the 38^th Tokyo Motor Show for Commercial and Barrier-Free Vehicles which will open in October, and its participation in the environment-focused 2005 World Exposition in Aichi.

Finally, I am pleased to announce that JAMA has established a new head office in Tokyo as of January 1^st. This move is intended to provide a forum that facilitates exchanges and reinforces liaison between JAMA and Japan's other automobile-related organizations which, together with JAMA, have also shifted their secretariats to the new Jidosha Kaikan.

We look forward to the continued support of all our friends and colleagues in the new year as we work, in collaboration with our members, to advance the activities of the automobile industry.