A New Role for Natural Resources Companies

By promoting business partnerships, producers of primary materials can find a new source of competitive advantage.

Illustration by Keith Negley

Around the world, natural resources companies — producers of agricultural staples, oil and gas, lumber and wood  products, basic chemicals, and many minerals — are facing unprecedented volatility in supply and demand. The global population is poised to reach 9 billion by 2050, and much of the growth will be in emerging markets. Millions of people in China, India, Latin America, and Southeast Asia are entering the middle class for the first time, increasing their demand for energy, housing, and transportation. At the same time, because of economic turbulence, rapid technological change, and the ever-present dynamics of gluts and shortages in most resource industries, there is no guarantee that the price of raw materials will continue to rise. Adding to this uncertainty are concerns about the impact this growing demand will have on the environment.

These challenges suggest that we need a new way to think about natural resources — a change in mind-set from simply managing resources to practicing resource leadership. Resource producers have always been constrained by their view that the primary goods they sell are commodities with which they compete on the basis of price alone; their customers determine how they should be used. That approach, however, has led producers to the status quo: a largely reactive position with a short time horizon, and little opportunity to differentiate themselves from their competitors.

Resource leadership, in contrast, entails thinking strategically about natural resources from the moment they are pulled from the earth through to their end use. Unfortunately, this form of leadership is rare in all too many industries. It involves the ability to see the complex interdependencies of the natural resources system; to engage key stakeholders upstream, downstream, and across sectors; and to promote innovation with economic and ecological benefits within the resource system. Resource leadership represents a shift from short-term thinking to stewarding resources for the long term.

Imagine a company that embraced this new model. As a resource producer at the beginning of the value chain, this company would contribute solutions and expertise — culled from working directly with the materials at the earliest stages — in collaborating with its customers to find cost savings, reduce waste, and improve service. The expertise developed this way would also lessen the impact on the environment, by helping all users, starting at the source, operate more effectively, with less waste.

To succeed, resource leadership requires a partnership-oriented model, in which the producers and consumers of raw materials have a mutual interest in process and product innovation. The producer helps the consumer identify cost savings and access technological innovations throughout the value chain, and as a result can charge slightly higher prices without feeling vulnerable to lower-priced competitors. A business model with a mutual commitment to the stewardship of resources could work, but only when there is a high-enough level of trust between these two groups.

A growing number of companies, both producers and users of natural resources, are recognizing the potential value of this approach. For example, Air Canada, the national Canadian airline, has set out to dramatically improve its performance amid competition from low-cost carriers and pressure from rising fuel costs (its fuel bill in 2011 was more than US$3 billion). It needs to look for ways to replace or improve legacy practices that hinder profitability. The airline industry may also be faced with carbon taxes linked to emissions limits set by the European Union Emissions Trading Scheme, a multinational cap and trade system for all planes using E.U. airports. (The program went into effect January 1, 2012; first payments are due in 2013.)

o this end, the company has established a department focused on achieving fuel savings and carbon emissions reductions. Air Canada has recognized that alternative fuels (such as biofuels) can help the airline meet its energy requirements while reducing emissions. The airline’s leaders believe that partnering with alternative fuel producers or suppliers to create economic and environmental solutions could be financially advantageous and reduce the company’s exposure to fuel price volatility. A scenario in which the airline industry would be willing to pay a small premium and commit to a significant, steady demand for alternative fuels would promote the development of new technologies; reduce the financial burden of carbon taxes; and, in the long term, create a lower-cost, sustainable, and ecologically friendly solution to the airlines’ energy requirements.

Business leaders have often tried to adopt this way of thinking, but they have largely found they cannot do it alone. A resource leadership approach can be implemented only through intensive attention not just within a company, but throughout its network of producers, suppliers, regulators, and customers. Such a consortium vastly increases the margin for creative alternatives and innovation, and it distributes the costs of research and development.

Here, the importance of government policymakers comes into play. The leaders of resource-producing nations — such as Canada, the U.S., Australia, and Brazil — have tremendous opportunities to promote resource leadership. These leaders can provide their national resources companies with opportunities for shared research, distribution, and even marketing (imagine an ad campaign, similar to “Intel Inside,” along the lines of “This product contains Canadian resources developed with ‘cradle-to-cradle’ care”). They can also generate tax and trade incentives for cross-sector collaboration in industry clusters committed to improving stewardship of resources. Canada already provides tax incentives for renewable energy enterprises. Resource leadership initiatives could be included as part of these policies.

National projects like this can have global reach. Pioneering resource leaders, having realized economic and ecological advantages in the initial resource consortia within their own regions, can generate knowledge, technologies, and practices with significant export value. The Netherlands, for instance, has turned its experience with dikes and levees into a national industry. About 2,000 Dutch engineering companies exist, often exporting their expertise to customers in New Orleans, Dubai, and other waterfront areas.

It will take high-volume resource consumers in partnership with resource providers — and supported by policymakers — to create this new business model. Much of the intellectual, social, and commercial resource leadership momentum has stalled in the past because of narrow political and economic perspectives. But as the natural resource challenge reaches a critical state, it is time to move past the old way of thinking.

Recent headlines only reinforce resource leadership’s game-changing potential. A greater awareness of the big picture would enable policymakers and resource-producing and -consuming companies to engage with other key stakeholders: local communities and the grassroots politicians that represent them. When we started writing this article in early 2012, U.S. President Barack Obama had recently put on hold the TransCanada Corporation’s proposed Keystone XL pipeline — which would carry primarily Canadian (and some U.S.) oil to refineries in Oklahoma and Texas — because of environmental-impact concerns. The resulting debate only intensified in March, when Obama supported the expedited construction of the southern portion of the pipeline, from Oklahoma to the Gulf of Mexico.

Battles are also shaping up over several El Paso–based Trans-Mountain Oil Company pipeline proposals aimed at sending Canadian oil to China. In all of these cases, closer engagement among the relevant parties would have brought concerns to the forefront earlier, and the groups could have worked together to come up with possible solutions. Collaboration is as complex, time-consuming, and costly as the science and engineering of pipeline technology. This is where resource leadership can shine: It builds shared responsibility for jobs, oil security, and environmental protection across all sectors.

By embracing this responsibility for the way resources are used, natural resource producers can help the rest of the world learn to employ raw materials wisely, and can safeguard their industries from competition. They can also discover a new source of resilience: their own distinctive knowledge and capability, which is one resource that is practically guaranteed to increase in value.

Rethinking the Product Launch

Your customer value proposition is the key to organic growth — for a fast-food chain like Wendy’s, or for any other consumer business.

Illustration by Barry Falls

If you could consistently drive organic growth, how much would that be worth? Quite a lot, especially in mature industries where the customer base isn’t growing much and people are habitually loyal to their favorite brands. For many companies interested in growing their markets by launching new products or services, having a framework for organic growth based on a better customer value proposition could make all the difference.

By customer value proposition, we mean everything a customer receives, tangible and intangible, for the money he or she pays. The definition can be expressed as an equation: customer value = (product performance + service delivered + image) / price paid.

For example, consider the quick-service restaurant (QSR) industry (also known as the fast-food industry). According to recent Booz & Company research, QSR customers can be segmented into five basic groups, based on the overall reason they pick a particular fast-food restaurant. Some customers look for a pleasing ritual; some are price sensitive; some want to maximize convenience; and some seek an experience of pure indulgence. A smaller cohort of customers want it all; they are looking for all these things, and some health benefits in addition.

Quick-service restaurant chains constantly develop new product and service offerings that align with different attributes. This same research found that McDonald’s, Taco Bell, and Burger King excel at developing products for customers who are price sensitive; KFC and Pizza Hut have come the closest to offering an experience of pure indulgence. Any QSR company that wants to grow organically must create either an improved value proposition for the segment it already leads (thus increasing its market share) or a new value proposition for a segment it does not currently lead.

Let’s use Wendy’s International Inc., one of the world’s largest hamburger restaurant chains, as an example. We’ll start with a disclaimer: This article claims no firsthand knowledge of Wendy’s and is a purely hypothetical exercise, based largely on an analysis we conducted as outsiders. We are also ignoring some of the competitive realities of the QSR industry, including the overwhelming importance of store location. When customers are about to spend their dollars at their favorite quick-service restaurant, a rival chain has only a fraction of a second to get them to even consider going elsewhere. Even with those factors left out, the journey by which we get to a recommendation for Wendy’s should be instructive, since the way of thinking about customer value propositions would be the same for any company, regardless of industry.

Wendy’s, founded in 1969 in Columbus, Ohio, has been known for its large, square hamburger portions; its first major ad campaign, in the 1980s, introduced the expression “Where’s the beef?” which quickly entered popular culture. It was also the first QSR to introduce salads as a regular menu item. The chain, which maintains some coherence by not serving breakfast, nonetheless scores high among consumers who “want it all.” Unfortunately, this is the smallest of the five segments, and the expectations of these segment members are, by definition, diffuse, which makes it difficult for Wendy’s to develop a clearly differentiated market position.

To grow its share, the company must introduce a new value proposition that appeals to larger, more commercially viable groups of customers. That will require launching some new products and services that are coherent with the rest of its offerings, making use of Wendy’s existing strengths to attract a new segment of people who have not identified with this chain in the past. That’s not an easy task, and any obvious ideas for new propositions — at Wendy’s or other companies — should be regarded warily.

Many companies try to “bottle lightning” when launching new products or services. Either they base their decisions on their own executives’ hunches or they create a disciplined process that siphons the creativity and speed out of the organization. But neither approach leads to sustainable success. Those companies that beat the odds and succeed with multiple new-product launches, time after time, tend to apply a certain type of discipline. This discipline involves three separate practices, combining creative inspiration and analysis. Each of these three practices is both a “thought starter,” raising new concepts about directions for growth, and an “idea filter,” helping a team decide which products and services to launch and how to position them. The three practices are:

1. Market-back analysis: an approach to gathering consumer insights that pinpoints the value consumers assign to different parts of a product or service, and produces actionable intelligence as a result. Wendy’s, for example, would have to look at its potential customers, the attributes they value in quick-service restaurants, and the needs that are still unmet.

2. Darwinian competitive review: a close observation of the customer value propositions that have been shown to work across multiple markets, and the competitors who have already established themselves in those spaces. Within the fast-food restaurant landscape, Wendy’s would consider the track record of mainstream and niche contenders around the globe. It would also look for non-QSR models and innovations that might be adjusted for its business.

3. Capabilities-forward assessment: a dispassionate look at what the company already does well, and which new value propositions its capabilities system could support. If your company has a notable form of prowess, it behooves you to understand what other products or services that capability might help deliver. For instance, if your kitchen setup excels at producing made-to-order hamburgers, might that flexibility also be extended to new entrees, side dishes, beverages, and desserts?

When Launches Fall Short

Managers are not accustomed to this level of rigor in decision making about organic growth, and that helps explain why innovation initiatives produce disappointment more often than success. Many times, when a product or service is introduced, customers fail to see a reason to switch or upgrade. The obstacles to successful innovation aren’t new, but they have become more challenging in an era of global economic strain, low job and wage growth, and cautious consumer spending. In this difficult environment, bad or poorly executed ideas have nowhere to hide.

In retrospect, innovators can usually explain why a given product succeeds or fails. For instance, when McDonald’s introduced the Arch Deluxe in 1996, the company invested US$300 million in marketing, research, and production. This limited-edition hamburger was specifically marketed to adults (the ad campaign showed kids rejecting it), with the slogan “the burger with the grown-up taste” and a recipe, created by a well-known chef, that included specialty condiments, Spanish onions, and hickory-smoked bacon. The hamburger failed to become popular and was soon discontinued. With the benefit of hindsight, McDonald’s executives recognized that their plans had not accounted for the factors driving customer decisions. Some customers would not pay the relatively high price (especially because McDonald’s is regarded as a price leader), and others were apparently holding out for a healthier alternative.

Similar prominent stories of product launch disappointments include New Coke, the Apple Newton, the BlackBerry tablet, the Tata Nano, and many more. In the packaged-goods industry, for example, a record number of products were introduced in 2005. As tracked by the research group Information Resources, less than 1 percent exceeded $100 million in Year One sales, only 10 percent earned sales above $20 million, and less than 25 percent reached sales of $7.5 million.

Businesses try to avoid these failures, of course, by applying ever more sophisticated techniques for testing the customer value proposition of a new product or service. These methods include surveys, focus groups, and conjoint analysis (the use of statistically weighted surveys to compare combinations of product attributes). But customer value proposition efforts can fall short for any number of reasons. Sometimes the wrong research method is used: for example, conjoint analysis where rapid prototyping would be more appropriate. Sometimes the right statistical method is used, but it is misapplied. Sometimes the results of the research are not considered in the context of the brand’s existing position, the market realities, or the would-be innovator’s capabilities system. And at times, good ideas fail because of problems in execution.

Creating a successful customer value proposition takes intuition and experience, but the odds of success go up if a structured process is applied. This process should bring together the three practices of market-back analysis, Darwinian competitive review, and capabilities-forward assessment.

Market-Back Analysis

Actions speak louder than words, but all too often, market research merely asks for words; it simply questions consumers about their attitudes, likes, and dislikes. Instead, the focus should be on understanding consumer behavior: for example, the trade-offs consumers make when considering a purchase, and the factors that drive them to switch brands, products, or channels.

One way to gain this knowledge is to marry data from surveys — explorations of individuals’ preferences and expected future behaviors — with information about their actual behavior. This has the advantage of grounding what people say with insight about what they do. Another approach is to develop statistics-based research on product options: either conjoint analysis or one of its variants, such as maximum difference analysis. This technique presents consumers with a series of feature and price bundles and infers from their choices which product attributes or features are most important to them. A third approach is to create simulated shopping experiences, which mimic as closely as possible the choices that consumers face in the real marketplace.

These analyses can become the basis of customer segmentation, allowing you to focus on specific groups of customers on the basis of their priorities and price sensitivity. Consider: Who are your target customers? Which attributes and product features matter most to them? Where is your “headroom” — the best opportunity for picking up customers and market share? What would it take to get customers of other providers to switch to your products or services?

For this article, simulating an analysis for Wendy’s, we surveyed a group of potential quick-service restaurant consumers, asking them what attributes they most value in their fast-food restaurants. The patterns of consumer preferences identified by the analysis sorted naturally into five distinct segments, as noted earlier:

• About 21 percent of survey respondents ranked convenience and familiarity as important attributes. Members of this segment are looking for a pleasing ritualand don’t want to be surprised.

• About 19 percent of respondents mentioned price affordability and convenience as valued attributes. This is the price-sensitivity segment. Its members also tend to favor delicious food and perceived healthiness, so long as it doesn’t cost too much.

• About 18 percent of respondents are interested only in convenience. No other attribute receives an above-average mention from them. They focus on the quick in QSR.

• About 16 percent of the respondents cared most for pure indulgence. Within this group, more than half rate delicious food (in general) and taste (of the hamburger itself) as important attributes.

• The last category, I want it all, encompassed only 10 percent of respondents. Unsurprisingly, they ranked nearly all the attributes highly. More than half of them valued taste, delicious food, and being familiar with the store; more than 75 percent valued perceived healthiness and convenience. The only low-ranked attribute was price.

As noted, Wendy’s is the go-to restaurant for this last group — an enviable position in some respects. (Some quick-service restaurants, such as Dunkin’ Donuts, seem not to command any segment consistently.) But the want-it-all segment does not appear to be large or profitable enough to support further growth. Other, larger segments hold more promise for Wendy’s. If it wants to grow profitably, the company needs to look across the customer segments where it is not currently the leader and figure out where it has the most headroom. In other words, it needs to look more closely at its rivals’ least satisfied consumers.

Darwinian Competitive Review

Innovation executives and chief marketing officers are always thinking about new product or service introductions and enhancements — about how they can come up with the Next Big Thing. Few business possibilities are as exciting as a new idea that could become a company’s next billion-dollar product, and these ideas frequently involve a real spark of creativity. However, even the best ideas must map to some proven value proposition — something that has already worked elsewhere. If no such analog can be found, it’s a good bet the company’s new or enhanced product won’t be successful.

That is the point of calling market dynamics Darwinian. No customer value proposition emerges alone; like species that evolve through natural selection, all marketable ideas have antecedents. At best, they’re applications of ideas that have proven successful in the past. The emulated business model need not be from the same industry; it could be something that the company borrowed from another industry. Ideas such as providing expert customer service to justify premium pricing or becoming a leader in environmental soundness have leaped across a remarkably diverse set of industries, including food, energy, automobiles, and consumer electronics.

The challenge with Darwinian market dynamics is to figure out the value propositions that are open to innovative new entrants. Consider: What are the most successful customer value propositions in the world today, and why do they work? What do competitors offer, and how does that vary by customer type and market?

For this article, we conducted a scan of competitive value propositions in the QSR sector around the world. We discovered seven that have survived Darwinian natural selection: value (including low price), convenience, experience (an appealing restaurant environment), familiarity, health, taste (of the food), and having a premium product or service. Most successful restaurant companies have not limited themselves to one of these value propositions; instead, they combine two or more to configure their identity. Starbucks offers convenience and experience. Subway offers familiarity (“pleasing ritual”) and a perception of nutritional value (it is one of the very few QSR players that has successfully promoted the healthfulness of its offerings).

By testing consumer perceptions of rival brands in our survey, we learned that some attributes are virtually locked up. McDonald’s, the industry leader, has staked its livelihood on price sensitivity and convenience, and it will do everything necessary to defend its leadership position. Meanwhile, among the mainstream (non-premium) QSRs in the United States, having an appealing consumer experience seems to be underrepresented. It is possible that Wendy’s could improve its customer value proposition along these lines.

Capabilities-Forward Assessment

A capabilities system is the integrated combination of processes, practices, skills, competencies, technologies, and culture that allows a company to deliver its distinctive value proposition in a competitively advantaged fashion. The most coherent companies tend to have three to six differentiated capabilities that combine into a capabilities system, reinforcing one another, creating barriers against competition, and giving companies the right to win in their chosen markets. (Six is the maximum number, empirical observation suggests, that companies can maintain.) Differentiated capabilities are specific and usually cut across multiple functions. Amazon’s genius at retail interface design, Tesco’s application of data in the service of increasing customer loyalty, and Honda’s leadership in internal combustion engines are all examples of differentiated capabilities. Having the right capabilities in alignment can make the difference between mediocrity and greatness — in offering a product at “low cost” versus “lowest cost,” for example, or providing casual customer engagement versus extreme customer satisfaction.

When a company sets out to create a new customer value proposition, it sometimes has to apply its existing capabilities system in a different way or adapt it to support a broader product or service offering. This is the essence of a company being capabilities-forward in its thinking. An example of this was Apple’s launch of iTunes in 2001. The iTunes service took advantage of Apple’s capabilities system, including the many things Apple did (and does) to make complicated technological products intuitive. Indeed, Apple has famously adapted its capabilities for beautiful, functional design and consumer insight into one new market after another: data processing (computers), consumer products (the iPod), mobile phones, online entertainment (music and video), retail stores, tablets, and now publishing (books and magazines). If Apple TV achieves similar success, it will be another example of the dramatic reach of this capabilities system. In emulating this approach to growth, it’s important to remember that Apple had to adapt its capabilities system along the way, by adding an ability to manage content partnerships and work with different kinds of network providers. Only by doing this could Apple succeed with its customer value proposition and win in a new area. (It’s still not clear whether this capability will be strong enough to meet the challenge of providing programs for Apple TV.)

An exercise for articulating your current three to six differentiated capabilities is thus an essential starting point for your growth plans. Consider the following: What capabilities system do you have in place today? How might these capabilities deliver a new product or service to your current or a new market? Given your market “playbook,” what capabilities do you need to invest in, acquire, or develop, to deliver your new customer value proposition?

Looking at Wendy’s from the outside, one might conclude that the restaurant has three truly differentiated capabilities. The first is an ability to project comfort and a homey experience through its brand. The second — reflected in a menu that is relatively broad and offers several healthy choices — is the development and delivery of multiple food types. This includes having enough customer insight to understand which menu items get consumers excited. And the third is a system for procuring and transporting a variety of ingredients, including higher-quality meats than either McDonald’s or Burger King offers.

From Analysis to Product Launch

When markets are new, and competition is embryonic or nonexistent, it may be possible to succeed with a new product by using only one of the three practices: market-back analysis, Darwinian competitive review, or capabilities-forward assessment. Even a hastily built fighting force can gain ground in a new or undefended territory. In more heavily defended, more mature markets, it is far better to apply these three approaches together. We recognize that unpredictable factors often play a role in product launches, even in mature markets: the arrival of an enabling technology, a marketing breakthrough, or, yes, lucky timing. The three practices, no matter how shrewdly applied as thought starters and idea filters, can’t help much with these “X factors.” But they can provide a framework for systematizing the innovation process, one that makes success more likely.

Thus, one can imagine the Wendy’s executives, after completing all three practices, realizing that they could not make much headway among price-sensitive consumers or consumers focused primarily on convenience. As we noted, McDonald’s has these value propositions sewn up. But Wendy’s might look differently at the pure indulgence value proposition. The chain’s differentiated capabilities in developing a broad range of foods and in handling higher-quality meats could put this segment within the company’s reach. Pure indulgence consumers might represent a natural new target, a group Wendy’s could reach most easily from its base among those who want it all. To succeed with this group, the company would have to think freshly about its overall store experience, and fulfill the expectations of superior taste that these customers hold.Wendy’s would next have to figure out which of its existing capabilities could be leveraged to create what customers would perceive as an enjoyable, indulgent dining experience. In addition, what capabilities did the restaurant chain lack? How would Wendy’s have to expand its capabilities system to succeed with indulgent food?

As it happens, although this analysis has been purely hypothetical, we note that Wendy’s has adopted an approach similar to what we envision. It has an active re-design of its customer value proposition under way with an apparent eye for indulgence (its Hot ‘N Juicy burger, introduced late in 2011, is one example) and a rotating menu of great-tasting side dishes: natural-cut French fries with sea salt, gourmet salads, and so on. Its new advertising campaign (including its recent “eat like a baby” television spots) emphasizes indulgent themes. It is promoting natural ingredients for taste and satisfaction. In early 2012, Wendy’s passed Burger King to become the second-largest hamburger chain in revenues in the United States.

One can imagine Wendy’s taking the approach still further to differentiate itself. For example, it could be the first QSR to carry Greek yogurt desserts or other indulgent foods. The more it focuses on this distinctive approach — difficult for competitors to replicate and consistent with its capabilities — the greater the number of people who could be drawn in, beyond the chain’s original want-it-all consumer segment. This could ultimately drive significant incremental traffic and increase average ticket size across the store network. Moreover, Darwinian competitive review might show that both the taste- and experience-focused value propositions were relevant in multiple geographic markets.

In discussing brand expansion and organic growth, many people immediately gravitate to the most dramatic examples of success in consumer goods with excellent product development processes — companies like Procter & Gamble or Toyota. Others focus on the heroic genius of innovation, recalling Steve Jobs’s famous answer when Walter Isaacson asked him what market research he had done in advance of developing the iPad tablet computer: “None. It’s not the consumer’s job to know what they want.”

If it’s your company’s job to know what your consumers want, then the three component practices of a customer value proposition represent a systematic way to accomplish this. As we’ve said, these practices are thought starters that will give you the seeds with which to formulate ideas. They are also useful idea filters for ensuring that the value proposition will succeed. A market-back approach will ensure that the market is big enough and willing to pay appropriate prices; the capabilities framework ensures that the company can be good enough to realize its intentions; and the Darwinian scan reveals competitive barriers and unseen opportunities. Together, they combine the attributes that marketing strategists need most: empathetic artistry and analytic rigor.

 

 

 

ditto..

Japan’s Top-30 Best Selling Models

Japan is the world's third largest auto producing country, producing 8.4 million cars last year, behind China's 18.4 million and USA's 8.7 million.

The automotive industry is very important to Japan. Contributing 15 percent of Japan's manufacturing exports value, the auto sector contributes more to Japan's economy than its well established electronics sector, which has since been overtaken by the Taiwan and the likes of Apple have overtaken Sony.

Japan's 127.5 million population buys about 5 million new vehicles each year (excluding trucks and buses). 78 percent of Japan's households own a car but only 42 percent own more than one car.

Japan has one of the highest car ownership cost in the world. Compared to Malaysia, it may be cheaper to buy a car in Japan but maintaining one and keeping it road legal is very expensive. Vehicles are required to undergo a mandatory 'shaken' inspection every two years. Inspection cost varies depending on the vehicle's weight. It may cost between 50,000 Yen (RM 2,000) to 200,000 Yen (RM 8,000). This is excluding the cost of repair before your vehicle can pass its 'Shaken' test.

Because of the very strict safety standards imposed, most mechanics don't do mechanical repairs on individual parts. Instead, faulty parts are usually replaced. Which explains the high number of reconditioned parts being imported by parts dealers in Malaysia.

Rust spots, however minor, will not be tolerated by 'Shaken' inspectors. On cars over five years old, it is not uncommon for to require entire brake system replaced. You are looking at easily over RM2,000 in preparing your vehicle for its 'Shaken.'

As such, the average lifespan of a car in Japan is only around five to seven years. After which, it is no longer economical to maintain them anymore. These cars are often reconditioned and imported by grey importers from other countries, like Malaysia.

The maximum loan tenure period is at five years. But financing is not necessary required by car buyers. The average annual income of a university graduate in Japan is about 3.2 million Yen. A Toyota Aqua (Prius c) for example, starts at 1.69 million Yen, slightly over half a year's worth of salary. But the most popular young graduate's car is a Suzuki Wagon R, starting at about 1.1 million Yen, just a a third of a year's worth of salary.

I estimate the average annual salary of a Malaysian graduate at around RM 35,000. The most popular graduate's car, a Perodua Myvi, starts at RM 44,000.

However, the young people of Japan no longer see cars as a necessity, or even a status symbol anymore. Rather, a car is viewed as merely transportation tool, a necessary inconvenience to those living in areas where public transport is not easily available.

The young people of Japan are indifferent about the types of cars they own, with cheaper, basic variants often favoured over higher range models. Indeed, there is a now a clear shift towards smaller cars with basic features.

With the high cost of car ownership and a network ultra reliable public transport, it is not difficult to understand where they are coming from.

In such a saturated car market, one of the last frontiers for automakers to squeeze additional sales are dog lovers and women. The pet industry is huge in Japan. In a society where European-like family friendly work place policy for women is still a rarity, most women delay or even put off entirely child rearing and marriage. Instead, many Japanese women spend a lot on pet grooming.

As dogs, other than guide dogs for the blind are not allowed in trains, many car makers are designing cars to be dog friendly.

For security reasons, more women find a stronger reason to pay for a car than men, who is likely to be satisfied commuting via public transport. Indeed, the funny trend about Japan is that there are more women interested in the joy of driving than men.

Forget about what you saw in Fast and Furious and Initial D anime. In reality, driving and cars are not a big thing in Japan anymore. Instead of street racers and drifters glorified by movies, Youtube and manga comics, it is women who dominate Japan's automotive scene because they spend more on cars, especially cute little kei car compacts, than men.

Kei cars are very popular. Exempted from weight tax, parking space purchase from the local municipal (a one time fee when purchasing a new car) and registration cost, they are the cheapest to run.

The origin of kei cars, a tax regulaton bracket, originated from Japan's post war years where fuel had to be rationed. Kei cars are limited to only 660cc engine capacity, 3,400 mm long, 1,480 mm wide and 2,000 mm high.

Japan has now entered what is called a demotorization phase. Car sales peaked in 1990, with 7.7 million vehicles sold. Although Japan is the key focus on all discussions about demotorization, the phenomenon is not unique to Japan. The same trend is noted in major cities of Western Europe, and to a certain extent, even in metropolitian cities in USA, which saw application of driving licenses peaking in 2004.

Up until recently, kei cars is the largest car segment in Japan. But this trend changed in 2010, as a result of government incentives for green cars, especially hybrids. Immediately this saw the Toyota Prius shoot to the top of the sales chart.

Sales of kei cars are not tabulated by JAMA, the source of Japan's vehicle sales data, as kei cars do not go through the same registration process as regular cars so it is difficult to track them. Sales of kei cars are tracked by Japan Mini Vehicles Association, which does not release monthly registration data.

The best selling kei car is Suzuki Wagon R. The Daihatsu Mira, Honda NBox and Daihatsu Tanto are other popular kei cars.

Both the Toyota Prius and Aqua hybrid now outsell any kei car model.

Toyota is the top selling car brand, controlling 36 percent of Japan's car market as of April 2012.

Below is a table of the top-30 best selling car models in Japan, as compiled by JAMA (Japan Auto Manufacturers Association) for the month of January to April 2012.

The list below is just a guide and is not a complete reflection of what's actually happening on the ground. Mitsubishi is the seventh largest brand in Japan but you won't see any Mitsubishi models on the top-30 list. For reasons I don't know, Mitsubishi does not provide a breakdown of their vehicle sales by model.

Also, kei cars are not included in this list, for reasons mentioned earlier.

...best defence of all time

CAS FOR THE DEFENCE ... keeper Iker Casillas saves Joao Moutinho's penalty in s/f

SPAIN’S sensational success is not based on their glorious passing game but on probably the best defence in football history.

Boss Vicente Del Bosque’s men have gone four matches without conceding and boast the best back-line at Euro 2012.

The one goal they let in came in their Group C opener against Italy.

Opta stats show Spain have not shipped a goal in the knockout stages of their lastTHREE major tournaments — an unprecedented nine do-or-die games.

They have not conceded more than one goal in any finals match since a 3-1 defeat by France in the 2006 World Cup and have not lost a knockout game since!

You have to go back to October 2010 to find the last time they let in two goals in a competitive match — a 3-2 win against Scotland in Glasgow, when Spain had 74 per cent possession.

It is precisely their ability to keep the ball that is their biggest defensive weapon as they starve the opposition of chances.

Former Manchester United ace Gerard Pique admitted that, for all the talk of ‘tiki-taka’ football, Spain’s stars see the priority as always to keep a clean sheet before anything else.

Pass masters Xavi and Xabi Alonso sweat blood for the team, as does midfield anchor Sergio Busquets, to snuff out any threat coming from their rivals.

Pique said: “Right now, defensively the team is performing so well. Not just the defence but the whole side has the mentality that the most important thing is to keep a clean sheet and from that point on to score goals. I think it is working.

“We’ve not conceded in four matches now, including extra-time and we are very happy.

“The mentality we have is we should not concede and Xavi, Xabi Alonso and Busquets help us so much in our defensive work. The two full-backs have also played a blinder.”

Spain’s midfield trio shield the Fabulous Five at the back and together they are the spine of Spain.

The men who make the case for the defence? Skipper Iker Casillas, former Liverpool ace Alvaro Arbeloa, Pique, Sergio Ramos and Jordi Alba who’s just completed a £12million move from Valencia to Barcelona .

Madrid star Ramos and Barcelona ace Pique were reportedly at loggerheads because of the intense rivalry between the El Clasico rivals but have put their difference aside to form an impenetrable duet.

Spain’s preparations were rocked as Carles Puyol pulled out injured but Pique and Ramos have been the best in Euro 2012.

Pique continued: “Game by game I think Sergio and I have gained in confidence. Defensively we are so good and then of course up front we have enough quality to create chances and try to score goals.”

It is this approach that makes other defensive sides of the past pale into insignificance. Italy also kept four clean sheets on the trot in Euro 1968 and Euro 1980 but they had missed out on the interim two tournaments meaning Spain hold the out-and-out record for clean sheets in one tournament – as well as for consecutive knock-out matches.

Spain’s defensive success goes hand –in-hand with their astonishing ability to keep the ball. In every tournament there is always an idiotic media bandwagon about to start rolling.

In this tournament we had a feeble attempt to liken Cristiano Ronaldo to Diego Maradona but even worse some suggested Spain were BORING.

On average they have had more than 60 per cent possession according to OPTA in all of their last three tournaments.

The last time Spain had less than 50per cent possession in a tournament match was the final against Germany in Euro 2008, when they had 46 per cent.

They STILL kept a clean sheet and won the game as Fernando Torres grabbed the priceless winner and under boss Luis Aragones Spain ended a 44-year trophy drought.

Amazingly this was the ONLY match Spain had less possession than their rivals in the last...EIGHT years.

So as they matched Germany’s feat of reaching three successive finals (as West Germany they won the 1972 European Championships, the 1974 World Cup and also reached the final of the 1976 Euros which they lost on pens to Czechoslovakia).

Pique missed out on Euro 2008 as it was the summer he quit United to return to Barcelona and go on from an Old Trafford sub to be regarded as the world’s best centre-half. He’s won everything with Barcelona and of course the World Cup so winning on Sunday is the only thing missing in his cabinet.

Win on Sunday and Spain will be rightly regarded as the best team of all time – the first to win three majors on the bounce.

And Pique acknowledged that adding: “After winning this I will want to win all of those trophies again. I don’t look at it like that. Spain deserves it for the people and this team. It will be so difficult to find another generation of such good players to put together and we have to take maximum advantage and win this competition.

“It happened with Barcelona too when we won everything and then you don’t velaue these little moments as much as you should.

“As I said before we will have to wait a long time to see a team reach so many finals and all of us have to appreciate the magnitude of this success.”

cars..cars..cars...

First things first. The cars you see here are not from Caterham. Confusion comes to the common man because it looks similar to the Caterham, which has enjoyed some presence due to a certain Formula 1 team. These cars are from Westfield, a car brand that is owned by a UK company called Potenza and sold here by a JV company formed with local partner DRB-Hicom, hence the name Hicom-Potenza for the local distribution company.

In Malaysia, there are two Westfield cars that are available for purchase – the Westfield Sport Turbo 3 and the Westfield AeroRace.

The car you see in the picture above is the Westfield Sport Turbo 3, and it’s only available as a factory-built car. It is powered by a 1.6 litre 16V Ecotec-4 Turbo VXR engine that is capable of 230 hp at 5,800 rpm and 260 Nm at 2,000 rpm. The engine is mated to a five-speed manual transmission. The ST3, in this current form, tips the scales at 715 kg. Put all that together and you’ll get blistering performance numbers: 0-100 km/h in 4.9 seconds and a top speed of 240 km/h.

The car measures 3,500 mm long, 1,630 mm wide and 1,100 mm high. The space frame chassis is made from lightweight Reynolds 631 tubing. Body panels are all fibreglass coloured gelcode.

Suspension and handling duties are carried out by double wishbones, cast alloy stub axles and coilover dampers (Mazda rear differentials). The ST3 gets solid disc brakes all round – four pot calipers for the front and two pot calipers for the rear. As for tyres, the ST3 wears 15-inch Team Dynamics Race Wheels wrapped in 205/50/15 Toyo R888 SG Compound Tyres.

The car also gets a laminated windscreen, detachable front and rear wheel arches and exhaust tips finished in chrome. Inside, car has fitted Cobra semi bucket adjustable seats with Westfield stitching. The interior is fully trimmed in PU leather. Westfield has also fitted an instrument panel from GM’s catalog.

Options that come with the car are the rear roll-bar protection, soft-top cover and side panel with vinyl door windows. The car also gets an electric boot-lid release.

Pictured above is the demo-version of the Westfield AeroRace, which is why there are two seats. It is powered by a 2.0 litre DOHC Ford Zetec engine that churns 170 hp. The engine features a multi-throttle body, programmable injection system and a 4-2-1 header with a catalyst exhaust manifold system. The engine is paired with a five-speed manual gearbox. This car is seriously light, only 525 kg, which gives the AeroRace a zero-to-hundred time of 5.4 seconds and a top speed of 240 km/h.

The AeroRace’s triangulated chassis is made from lightweight tubular steel and wears composite constructed lightweight body panels. The car features double-wishbone independent fully adjustable suspension system, uprated race springs, ultra lightweight billet aluminium brake calipers and adjustable brake bias master cylinder. The racecar runs on 13-inch Team Dynamics Race wheels wrapped in 205/60/13 Toyo R888 SG Compound tyres.

Being a full-fledged race car, this Westfield is outfitted with a five-point harness, a three-spoke motorsport race steering wheel, FIA Approved full cage with integrated driver side impact protection bar, lightweight race wiring looms, Lifeline plumbed 2.25 litre fire extinguisher, start/stop engine switch and central cut-off switch.

The car also has front and rear anti-roll bars, FIA Approved race bucket seats, uprated race brake pads, rear mirror and an LCD digital race dash meter with data logging and GPS Positioning.

Now that we’re done with introductions, let’s get down to the business end. With the law being as it is, I had to ask if the cars are road legal.

Of the two, only the Westfield Sport Turbo 3 will be road legal, soon. Hicom-Potenza has submitted all relevant documents to the proper authorities and is waiting for approval.

The Westfield AeroRace that Hicom-Potenza brings in will be for track-use only; a Motorsport AP is used to bring in the AeroRace, hence, its limited use. This AP also allows the AeroRace to avoid the other taxes and duties that is imposed on the road-legal car.

Price? The Westfield AeroRace will set you back approximately RM180,000. The price is only indicative as Hicom-Potenza is thinking of packaging the car with training courses that will allow owners to know their Westfield well.

It’s also thinking of leasing out the car for the one-make race. However, all plans are in still in development, so there is nothing concrete I can tell you yet. One of the considerations is to lease the car for RM25,000 for three races – the car will be taken care and stored by Hicom-Potenza as well, for that price.

As for the road-legal Westfield Turbo Sport 3, it will set you back in the ballpark of RM300,000. Hicom-Potenza is bringing in the car CBU; the Sport Turbo 3 is factory-built in the UK and does not come in complete kit versions. Which means all the excise duties and taxes will be imposed on the car. On top of that, there’s also shipping and landing costs to cover. Don’t forget the British Pound-Ringgit Malaysia exchange rate.

It leaves the company with a bit of a headache, as it knows the Westfields should be relatively affordable and accessible to most car enthusiast. But other options are being looked at that might allow the company to bring the price down.

One way is to go the CKD route. This will definitely bring the price of the road-legal car down. However, there is the issue of quality to consider, as customers would want their cars to have better workmanship, should DRB-Hicom assemble the cars.

In any case, even if the Sport Turbo 3 came in kit form, the regular Malaysian home lacks the space and facilities the car requires. You would also need some form of hoist so that you can work the underbody of the car, and you’ll definite need to be proficient in welding. Sorry to burst your bubble, mine was burst too.

Hicom-Potenza admits that there is a lot of work to be done. The main goal, however, is to get the Westfield name into as many households as possible. So, when the time comes to unveil its production sports car, at least part of the uphill task is already accomplished.

Driving impression: Westfield Sport Turbo 3

Surprise, surprise. This car is actually easy to drive. I admit, I thought I’d get chewed on and spat out on the gravel, but this car is quite forgiving.

The throttle is responsive and it delivers power as how you want it. But there is turbo lag. It is a slow and easy build up of power before it all comes rushing in when the turbo kicks in. Which is great in the straights. At the corners, things do get on the edge because one wrong step will earn you a ticket to the gravel trap.

This car handles extremely well. Plenty of feedback, of course. But it has quick response and its precision makes it so much fun attacking the apexes. If you’re tall enough, you can actually see the front wheels and judge with more accuracy.

You’ll never feel out of control. This machine truly makes you feel one with it, like it knows what you are thinking. And the only time it goes out of sorts is when the driver becomes an ape behind the wheel.

Since this will be road legal, I do wonder how would one live with such a car.

Driving impression: Westfield AeroRace

Although the two-seater demo-version was available for the test drive session, I somehow found myself in the race-version of the AeroRace. I heard that the demo-version has longer first, second and third gear ratios, which is different than the race-prepped cars. In any case, I didn’t know what to expect. Sure, I’ve driven a few race-ready cars before, but they usually have a door and a roof. Those were a bit soft too. This has a poor excuse of a windshield. If I didn’t have a helmet on, my face would have been just as destroyed as Clarkson’s; I wouldn’t mind one bit.

Amazing is not a word to describe the AeroRace. This car is a wild beast. The gears are short and the distance between the numbers is even shorter. Flicking the gears is as every bit rapid and entertaining.

And you better know what you’re doing before prodding the accelerator. Merely pressing the accelerator does not necessarily deliver the horses. You need to push the pedal deeper. Then, power does not get sent to you, it gets thrown at you. Go out of your mind for a bit and you are guaranteed to face the wrong side of the traffic.

You can feel the spin as it happens, of course. You sit right at on its tail, just in front of the rear axles, which makes you feel the dynamics of the entire car. The steering is quick and accurate, and it translates verbatim everything you want the car to do. And for a brief moment, man and machine are truly one.

Stopping the car requires faith. The brakes don’t bite hard even when you’ve pushed the brake pedal to the floor. But you are stopping quickly. It is unnerving at first, but after a few laps, you’ll be braking deeper into the corners.

Do I even need to mention that this car has no pitch and no yaw? It stays pressed to the road, constantly. I did not record a lap time, how could I when I the car demanded my all of my attention. In the end, it didn’t matter because this car did what it needed to do – increased my heartbeat, put a smile on my face and made me feel alive.

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