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U.S. Market Dynamics and Regulations for Kei Cars Amid Presidential Comments

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Introduction

In a recent address, President Trump referenced "very small" vehicles popular in Asia, known as kei cars, noting their size and appearance. He stated he had authorized the Secretary of Transportation to "immediately approve the production of those cars" in the U.S. This comment occurred during a press conference concerning the relaxation of fuel economy regulations.

Kei Car Characteristics and U.S. Regulations

Kei cars are a class of small vehicles popular in Japan. While it is not illegal to manufacture small cars in the U.S., kei cars built for foreign markets do not meet current U.S. federal safety standards. Consequently, these vehicles cannot be imported for general use unless they qualify as antiques, defined as being at least 25 years old. This 25-year exemption bypasses federal safety standards. The Department of Transportation has confirmed that U.S. safety standards for small cars are not being waived.

Owner Perspectives and Utility

Enthusiasts in the U.S. who own imported antique kei vehicles highlight attributes such as handling characteristics and unique appearance. Owners of kei trucks and vans cite practical benefits. For example, some kei trucks, despite being shorter than modern compact cars, can feature a 6-foot bed, accommodating items like a sheet of plywood.

Economically, new kei vehicles can be purchased in Japan for under $15,000. Imported antique models have been acquired for approximately $8,000, contrasting with an average price of over $34,000 for mainstream used pickup trucks in the U.S.

Safety Considerations

Drawbacks of older kei vehicles include limited safety features. Owners acknowledge the absence of modern safety equipment such as airbags, anti-lock braking systems (ABS), and crumple zones, noting that the vehicle's design can result in direct impact to the driver's lower body in a collision. Some states have prohibited the registration of imported antique kei vehicles due to safety concerns, a point of contention for enthusiasts who note the legality of motorcycles on highways. Proponents of kei cars suggest that their slow speed and small size could offer safety advantages for pedestrians, and their design often provides superior driver visibility compared to larger vehicles. However, concerns persist regarding the visibility of kei cars to drivers of larger, faster vehicles on American roads.

Market Dynamics and Consumer Preference

Despite the interest from a niche group, the U.S. market exhibits a consistent preference for larger vehicles. Automotive industry analysis indicates that subcompact cars, the smallest category currently sold in the U.S., represent less than 1% of the market and are decreasing in sales volume. Past attempts to introduce small vehicles, such as the Smart fortwo, resulted in disappointing sales figures and eventual discontinuation in 2019. Automakers also tend to realize higher profit margins on larger vehicles. The consensus among surveyed kei car enthusiasts is that widespread adoption of these small, slower, and less expensive vehicles in the U.S. is unlikely.