U.S. President Donald Trump is considering introducing Japan's widely used kei cars (micro cars) to the United States.
According to Bloomberg and Axios on the 6th (local time), on the 5th President Trump officially instructed Minister of Transportation Sean Duffy to ease regulations so that Japan-spec kei cars can operate on roads in the United States.
The previous day at a White House event, President Trump mentioned Japan-spec kei cars and said they are "really small and cute." Right after ordering the deregulatory move on the 6th, he wrote on his social media, Truth Social, that he had "approved making very small cars (TINY CARS) in the United States."
According to Kelley Blue Book, a U.S. auto valuation outlet, the Trump administration plans to adjust safety and fuel economy rules to allow production in the United States of ultracompact cars similar to those in Japan, rather than importing finished vehicles from Japan.
Aggregated major vehicle data in the United States shows that as of December, the average transaction price for new cars in the United States has topped $48,000 (about 70.5 million won). With high interest rates persisting, the entry barrier for working-class buyers to purchase new cars has climbed to a record high.
Axios, a politics-focused outlet, said the Trump administration has promoted the move with the slogan "freedom means affordable cars." It is seen as an attempt to quell inflation complaints by supplying a large number of budget models.
Since taking office, President Trump has repeatedly argued that the previous Biden administration toughened auto fuel economy rules and pushed up car prices. The logic is that by holding internal combustion vehicles and manufacturers responsible for climate change, the Biden administration forced costly technology development and fuel economy improvements.
Under Japanese legal standards, kei cars are limited to a length of 3.4 meters, width of 1.48 meters, height of 2 meters or less, engine displacement of 660cc or less, and maximum output of 64 horsepower. In Korea, Kia Ray and Morning and Hyundai Motor Casper, which are classified as kei cars, are narrower and less powerful than Japan-spec kei cars. All domestic kei cars are nearly 20 centimeters longer than Japan-spec kei cars, and their displacement is at least 330cc larger.
Instead, their weapon is a low price. U.S. outlets projected that Japan-spec kei cars would sell in the United States for $10,000 to $15,000 (about 14.7 million to 22 million won). With the average new-car price approaching $50,000 (about 73.5 million won), vehicles priced at 20% to 33% of that level could look attractive to U.S. consumers.
However, the U.S. auto industry and safety experts said with one voice that given the U.S. road environment, current safety rules (FMVSS), and automakers' profitability structure, the odds are extremely low that kei cars will spread in the United States.
Vehicles on U.S. roads are getting bigger. Looking at the list of best-selling vehicles in the United States for the year through December, large pickup trucks or sport utility vehicles (SUVs) such as the Ford F-150, Chevrolet Silverado, and Toyota RAV4 occupy every spot from No. 1 to No. 10. Among relatively smaller models, the Honda Civic at No. 11 sold the most. Japan-spec kei cars are only about 60% the size of the Civic.
Experts noted that on U.S. roads crowded with large vehicles, Japan-spec kei cars, which weigh as little as 600 kilograms, have a significantly lower survival probability in crashes. The New York Times (NYT) said, "Japan-spec kei cars weigh less than half of a typical U.S. passenger car," adding, "They often lack space for airbags or side-impact protection."
Even if Japan-spec kei cars are introduced with difficulty, it remains uncertain whether they would pass the safety standards of the National Highway Traffic Safety Administration (NHTSA), considered the strictest in the world. Tiffany Sadegh, a University of Michigan law professor, told the NYT, "It's not impossible to realize Trump's directive, but to do so would require a sweeping revision of the Federal Motor Vehicle Safety Standards (FMVSS)," adding, "This is a very complex and time-consuming task."
The Trump administration promised full-throated support so that major U.S. automakers can build Japan-spec kei cars "built in America."
Automakers' calculus is complicated, because of low margin. In the structure of the auto industry, small cars have less per-unit margin than large vehicles. The two flagship U.S. automakers, General Motors (GM) and Ford, have discontinued not only kei cars at home but also small-car lines such as the Fiesta and Cruze.
Earlier, in the late 2000s, Mercedes-Benz Group introduced the ultracompact "Smart" to the U.S. market. Although the Smart had more generous width (1.66 meters) and displacement (1 liter) than Japan-spec kei cars, it failed to adapt to expensive parts, perceptions of low safety, and roads dominated by large vehicles. It ended up enjoying a brief initial buzz before exiting the U.S. market in 2019.
General Motors (GM) effectively signaled refusal to build Japan-spec kei cars, saying, "We already offer consumers a wide range of choices." Even Toyota, which makes kei cars in Japan through its subsidiary Daihatsu, drew a line, saying, "We do not comment on future product plans."
Citing experts, Bloomberg said Trump's "kei car introduction" directive is like Walmart cutting food quantities to lower the price of a Thanksgiving dinner package, adding, "Trump's proposal, instead of solving a structural cost-of-living crisis, is tantamount to telling people to make do with 'inferior goods.'"