Yesterday, President Trump shared plans for cutting the ambitious fuel-economy targets that automakers are supposed to hit in the near future. In the same address, he talked about how much he liked “small … cute” cars he recently saw in Japan, going so far as to say “get ready for those cars,” because his administration is “clearing the way” for them to be built here. Wait, what?
Today, there were a bunch of headlines about kei cars—the ultra-small, low-cost, low-power vehicles that Mr. Trump was surely referring to—coming to America as a result of the comments made at the address. As much as I love microcars and indeed, anything cute, I’m pretty confident absolutely nothing will come of what we heard.
Here’s the whole nugget from yesterday’s presentation that I’m referring to.
President Trump:
“If you go to Japan, where I just left, and if you go to South Korea, and other countries, they have a very small car, sort of like the Beetle used to be with the Volkswagen, they’re very small, they’re really cute, and I said, ‘How would that do in this country?’ And everyone seems to think ‘good,’ but they’re not allowed to build them, and I’ve authorized the Secretary to immediately approve the production of those cars. Some of the Japanese companies do a beautiful job, but we’re not allowed to make them in this country.”
Transportation Secretary Sean Duffy then jumped in to say:
“He gave me the directive to clear regulations on this, which we have, so if Toyota or any other company wants to make smaller, more affordable cars, fuel efficient, we have cleared the deck so they can make them and sell them in America.”
The phrase “kei car” specifically was not spoken—it sounded like Stellantis CEO Antonio Filosa said it at one point, but I think it was a disfluency misrepresented by automated captions. At any rate, Secretary Duffy’s comment didn’t really make any sense. The only actual rules preventing ultra-small cars from being built in the U.S. are crash-safety standards, which pretty much all kei-sized vehicles that currently exist could not pass.
The Trump Administration seems to love eliminating consumer protections, so maybe today’s high safety standards are not such a big hurdle, but they exist now. It’s not like a kei-car switch was flipped overnight and now Toyota’s going to start stamping out a Pixis variant at one of its stateside factories.
But even if crash testing were ended and air bag requirements were removed, there are other forces keeping kei cars as we know and love them from mass production for the American market.
First of all, it would take way too long for the price to be appealing to enough people for building factories to make sense. Americans have ultimately rejected every ultra-small, value-friendly car that’s been floated to the market in the last few decades—Smart, Toyota iQ, even the resoundingly practical Honda Fit was discontinued. Heck, Ford doesn’t even make sedans anymore, let alone low-MSRP hatchbacks like the Fiesta.
So, what, people will buy them because it’s all they can afford? No, first they’ll keep buying used F-150s (or, as Mr. Trump calls it, “the Ford 150,”) because they’ll still be cheaper than whatever a new Ameri-kei car would start at.
It’s not like Americans typically restrict their car shopping to what they can afford, anyway. We’ll never see car prices come down, but we’ll absolutely continue to see loan lengths and lease rates rise in the absence of regulation. The auto industry (every industry, really) is all about pivoting to recurring revenue streams, anyway. From a marketing perspective, it’ll be much easier to get people into generational debt to get a new high-trim pickup truck, or get them on a pay-per-mile subscription, than get them into a Trum-bant microcar.
Trust me, I’d be excited to see Suzuki Jimny and Honda Beat-type vehicles for sale in America as much as the next car dork, but it’s not going to happen. One of the most annoying things about all this is that Mr. Trump really could meaningfully and instantly reduce the cost of car ownership in America, basically overnight, by simply removing the tariffs he set up on vehicles and the parts to build and maintain them. Though somehow, I’m not optimistic about that happening, either.
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