The Parking Company Getting Young Japanese to Love Cars

Park24, which commands 70 percent of Japan’s car-share market, expects to almost double its fleet by 2019.

A Park24 employee drives a Toyota i-Road electric personal mobility vehicle along a street in Tokyo.

Photographer: Akio Kon/Bloomberg

What do you do when you’re the biggest parking company in a country where new-car sales have been on a gradual decline for the past decade? Koichi Nishikawa, the president of Japan’s Park24, decided to turn about 7,000 of his company’s 16,435 garages and lots around the country into spaces to hold vehicles available for short-term rental as part of a new car-sharing service. For a monthly fee of 1,030 yen, or about $8, members who sign up online or with a smartphone receive a member card that functions as a car key. Vehicles are booked online or using Park24’s smartphone app. Subscribers are charged in 15-minute increments. With 500,000 members, the car-sharing service has become one of the world’s biggest.

What’s remarkable is that more than 50 percent of members are in their 20s and 30s. In today’s Japan, many young people aren’t interested in cars because they can’t afford them; they spend disposable income instead on gadgets and smartphones. Twentysomethings accounted for about 13 percent of all driver’s license holders in Japan last year, compared with 21 percent in 2001, according to National Police Agency data. The cheapest car for sale, such as a Daihatsu or Suzuki basic minicar, costs about 800,000 yen ($6,670). The monthly fee for a parking spot in Tokyo runs from 30,000 yen to 50,000 yen. Researcher IHS Automotive forecasts that annual Japanese auto production will shrink to 8.4 million vehicles by 2022, from about 9.2 million last year.

A Park24 employee unlocks a car with a key card at a parking lot in Tokyo.

A Park24 employee unlocks a car with a key card.

Photographer: Akio Kon/ Bloomberg

Park24 is betting that young people still occasionally need to use cars for shopping, weekend trips, or, perhaps, to impress a date. “In my college days, you couldn’t ask a girl out without a car,” Nishikawa says of the status once bestowed by a set of wheels. He also doesn’t charge college students a monthly fee. The company owns 13,000 vehicles and plans to almost double the size of its fleet, to 25,000, by 2019. It’s one of the biggest buyers of new Japanese vehicles—more than 10,000 cars annually for the sharing business and a car-rental venture it acquired in 2009. It commands 70 percent of Japan’s car-share market.

Yu Makisumi is a typical Japanese twentysomething, intent on looking for a job and playing video games but with little interest in cars. “I have never heard of anyone coming to school by car,” he says. He owns a secondhand scooter and likes traveling with it. Four years ago, however, he joined Park24’s service after he and a friend saw a roadside advertisement and his friend encouraged him to sign up. He has a license and knows how to drive (the minimum driving age in Japan is 18). He says Park24 is inexpensive and convenient for taking longer trips with friends two to three hours away.

Chart: Share of Driver's Licenses in Japan Held by People in Their 20s

Shigeaki Kyotani joined Park24’s service in 2013 while a college student in Toyama, 350 kilometers (217 miles) northwest of Tokyo. He was surprised it was offered in a remote area and, because he had a license, decided to give it a try. “It’s unrealistic to buy and own a car given my current salary,” says Kyotani, who moved to Tokyo last year. With the high cost of keeping a car there, he says Park24 better suits his needs for trips within the city or to a local Ikea or Costco.

Nishikawa is convinced car-sharing will soon play a key role in urban transportation and help his business, as well as Japanese automakers. To prove it, he and Toyota Motor President Akio Toyoda signed off on a feasibility study testing the use of short-range electric vehicles for one-way car sharing (picking up at one location, dropping off at another), previously unavailable in Japan.

The project, the first phase of which ended in September, will use two Toyota cars: the electric three-wheel i-Road and four-wheel COMS. A cross between scooters and small cars, each carries no more than two people and can cruise short distances.

It’s important to get people driving early, Nishikawa says: “If you haven’t experienced the fun of driving or cars while you’re young, you won’t desire to buy a car when you’re older and have more money.”

The bottom line: Park24, which commands 70 percent of Japan’s car-share market, expects to almost double its fleet by 2019.

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