Buying a car is idiotic. It's better instead to have ¥10 million in the bank.
Such is the mentality of Japanese in their late 20s and early 30s, according to Hisakazu Matsuda's book "Ken-Shohi Sedai no Kenkyuu" ("Research into the Anticonsumption Generation").
The book, published in November 2009, delves into the behavior of a generation that has known only economic contraction. The "postbubble generation," as Matsuda defines it, came of age during the decline of Japan Inc.
The book, which has sold more than 10,000 copies, argues that the reluctance of young people to consume is not based on a lack of money but from a perception of future uncertainty, and represents a new generational character.
"No country other than Japan has experienced a 20-year bout of deflation that is still ongoing. That is why other countries are curious about my book," Matsuda said in an interview with The Japan Times.
The 54-year-old director of the Japan Consumer Marketing Research Institute points to articles in The New York Times and a Spanish paper that warn against following the path of Japan. A Chinese translation of his book is planned because many in
China, which lags a generation and a half behind Japan, want to learn from Japan's experience, he said.
Matsuda, who interviewed many young people of the postbubble generation for his book, said they have seen prices in free fall. For example, every three to six months, when TV makers such as Sony Corp. and Panasonic Corp. release new models, the prices of flat-screen TVs are slashed by 30 to 50 percent, reflecting the drop in prices of semiconductors and other mass-produced components, he said.
"The postbubble generation knows waiting is a wise choice. The older generations want to be the first to purchase cutting-edge products," he said.
Cars, TVs and overseas trips are particularly shunned by the young. Instead, they are drawn to mobile phones and smart phone applications, cooking utensils and inexpensive casual clothes.
According to a 2008 survey by the Japan Automobile Manufacturers Association Inc., college students ranked cars 17th among products of interest. When those now in their 20s and 30s were in college, cars ranked 10th, while those in now in their 40s and 50s ranked them seventh.
From 1997 to 2007, the number of overseas travelers in their 20s dropped more than 30 percent, according to Japan Travel Bureau Foundation statistics. Over the same period, the figures for every other older age group rose.
"They turn away from everything the older generations used to dream of having," he said.
"They don't study abroad because they don't want to learn foreign languages. They don't care about TOEIC scores," he said. "With the yen's recent strengthening, they have become a bit more interested in overseas trips, particularly to Australia. They say it is because the time difference is so small, they can call their friends and family when they feel lonely."
Matsuda argues the attitude toward consumption comes from a shared mentality of conformity and pessimism.
"They underwent or witnessed bullying at school in the '80s. The difference from previous generations was that the bullying could change overnight, so they feared it might be their turn the next day. Consequently, they are careful not to stand out," he said. "Then, they grow up without experiencing any success. They don't feel the taste of success after they start working.
"There is mass pessimism. They fear people despise them for buying a car because everybody in their generation thinks buying a car is economically a stupid choice."
Matsuda advises automakers such as Toyota Motor Corp. and Honda Motor Co. to develop innovative technology at low cost, such as solar-powered cars for ¥500,000, if they hope to entice the postbubble generation.
Consumer electronics makers such as Sony and Panasonic should abandon attempts to sell TVs to the young, who are satisfied with watching programs on their mobile phones, or watching nothing at all, he said. More popular are expensive rice cookers and vacuum cleaners because the young are spending more time at home, he added.
When the postbubble generation grows older, Matsuda predicts they will continue to rent apartments, stay unmarried and many will have ¥10 million in the bank by their 30s.
But he is unsure what they will spend their money on. Pastimes such as jogging around the Imperial Palace and climbing mountains will probably remain popular, he said.
"They will spend money on something they think is logical," he said, not the Armani suits that people of his day purchased to satisfy their vanity.
They may invest in small businesses or donate to charities if they think that is "a smart and cool thing to do," he said.