Yes, the sales of little Japanese Kei trucks (it’s pronounced “kay”) were up in 2023, one reason they have been getting a lot of attention from the media. The compact haulers, built to conform with Japan’s keijidōsha class of light vehicles, are practical as well as cheap and charming, so smitten American buyers have been importing them from their home markets at a higher rate. But we should keep things in perspective: According to the Japanese Used Motor Vehicle statistics, 7594 Kei trucks were imported into the U.S. last year. Ten years ago, before many of these Japanese market vehicles met the 25-year age limit to legally import into the U.S., that number was 797.

Meanwhile, Ford sold 750,789 new F-150s in 2023. Those who suggest that the backlash from state governments seeking to keep Kei trucks off the road is even partly motivated by the desire of manufacturers of full-sized pickups to keep the market for themselves, a view that has also been represented in the media, are probably incorrect.

Governments keeping them off the road is the other reason the tiny, right-hand-drive Kei trucks have been in the news, and we blame Rhode Island. While the federal government writes the rules controlling the importation of foreign market vehicles like Kei trucks, it’s up to individual states whether or not you can register and drive them on the road. According to multiple sources, Kei trucks are street-legal in 19 states. But in Rhode Island there are only 30 or so Kei trucks on the road so, as they’ve done in many places, Kei trucks have sort of driven under the radar when it came to the law.

Until this happened, as told last month by the Providence Journal: “Imagine this: You import a mini-truck from Japan after calling the Rhode Island Division of Motor Vehicles and being assured that you’ll be able to register it here. Several years later, you receive a notice from the DMV: The Japanese mini-truck’s registration has been revoked, and you’ll need to hand over the license plates.”

One of those owners was a constituent of State Senator Louis DiPalma, who began asking questions. Apparently, the state DMV had, since 2021, been re-evaluating its decision to issue registrations for Kei trucks based on existing law, and recently started demanding that owners return their license plates.

Publicity ensued, and the story was picked up by a raft of media sources, and officials in other states began asking questions about what their DMVs were doing about the danger represented by allowing Kei-sized vehicles on the road. Citizens began picking sides, and the next thing you know, outlets like NBC News and The Economist are reporting on the Kei kerfuffle.

And the whole mess is confusing. In Wyoming, you can drive your Kei truck on any road but an interstate highway. In Georgia, the Motor Vehicle Department conclusively insists that Kei vehicles “are not ‘street legal.’ Kei vehicles are barred from titling and registration.” That said, “…both customers and county tag offices have been confused by the title and registration laws relating to these vehicles. Due to this confusion, certain customers have successfully, albeit unlawfully, had their Kei vehicles titled and registered in Georgia.” Gee, whose fault is that?

Angry Kei truck owners have pointed out that motorcycles and scooters are allowed on public roads, as are hundred-year-old, 20-horsepower Ford Model Ts: Are they any safer than a Kei truck? In some states, the battle over Kei rights is getting downright contentious. Kei truck owners are banding together to advocate for fair treatment; the Texas Kei Vehicle Advocates, for example, report that they’ve already been successful in getting the state to reverse its ban on titling Kei trucks. A memo issued April 4 by the Texas Department of Motor Vehicles said, “The department has revised the titling and registration requirements for these vehicles. Effective immediately, mini vehicles are required to be titled and must be registered if operated on public roadways.”

This cultish American enthusiasm for Kei trucks likely calls for an explanation. While we are talking about the tiny, single-cabover pickups or microvans that you’ve likely seen, say, doing maintenance on a golf course, “Kei” refers to more than that.

Kei is short for kei jidōsha, which is Japanese for “light motor vehicle.” A vehicle that is considered a Kei—and this has changed over the years, dating back to 1949—is, since late 1998, the following: Has an engine no larger than 660cc (about 40 cubic inches); no more than 63 horsepower; is no longer than 3.4 meters (just over 11 feet), and no wider than 1.48 meters (just under five feet). By comparison, the 2024 Nissan Versa, one of the few remaining small cars sold here, is 14.7 feet long and has 122 horsepower.

Since—obviously—the tiny Kei is not built to the U.S. Federal Motor Vehicle Safety Standards, only Kei vehicles that are older than 25 years can be imported into the U.S., because vehicles that elderly aren’t subject to FMVSS. That’s why the newest Kei vehicles you see for sale in America are typically 1999 models.

There are also Kei cars, including some sporty ones like the Honda Beat and Suzuki Cappuccino convertibles, and the Autozam AZ-1, built by Mazda and featuring gullwing doors: Those three are especially appreciated by American collectors, and quite a few have been imported. Decent Beats and Cappuccinos start at under $7000, while the rare Autozam AZ-1 starts at about $12,000, and can climb to over $30,000.

But it’s the Kei truck that is pulling in the (relatively) big numbers, and there are many companies in America that want to sell you one. Among them is Japan Car FL, based in Oldsmar, Florida, just south of Tampa. They have been importing JDM (Japanese Domestic Market) vehicles since 2018. The small, family-owned company advertises that they are licensed, bonded and insured, which is important in the JDM world, because not every company is.

Among Japan Car FL’s Kei vehicles is a 1999 Honda Acty Kei truck with four-wheel-drive, air conditioning and custom wheels for $10,850, and an air-conditioned 1999 Subaru Sambar Classic Kei microvan for $12,250. Each, says Japan Car FL, “comes with a clean Florida title, and is ready to be driven home on the day of purchase.”

While Japan Car FL handles all types of JDM imports, the business is driven by Kei trucks and microvans, said owner Lana Kashchuk. “There has been an increase in queries as they become more and more popular. It’s the top seller.”

Buyers vary. Some customers use them for work—Kei trucks are affordable, maneuverable, and their small engines are easy on gas. Many have six-foot beds that rival bigger trucks in cubic-foot capacity. “We have a lot of small business owners who buy them for tree-trimming, pool service, that sort of thing. But we also have customers who use them instead of golf carts locally to take them shopping or to Home Depot, or they drive them on weekends to go to the beach,” Kashchuk said.

There’s no problem in Florida—for now, anyway—to get them registered and tagged. The state now officially refers to them “mini trucks,” for use on roads where the speed limit is 35 mph or less. “But at the same time they are not branded as ‘low-speed vehicles’—they are not golf carts, so they get a regular tag and a regular title,” she said. “We have a lot of customers who aren’t having any problems or issues because they have a license plate like any other car, and they have a title like any other car, but it says ‘MT’—mini truck.”

Modern Kei trucks and microvans have no problem keeping up with the normal flow of traffic—that 1999 Subaru Sambar Classic, for instance, has 54 horsepower, and is good for 70 mph. Yes, they may technically be limited to roads where the speed limit is just 35 mph, but many traffic officers will look the other way as long as a Kei isn’t holding up the show.

As in most states, you can’t register a vehicle in Florida without proof of insurance. You can insure Kei trucks, but you may have to shop around for an agent familiar with the category, Kashchuk said. “It all depends on the agent. He or she might be confused about the shorter VIN number—because it isn’t the usual 17 digits and letters like a typical U.S. car, and because they may have a model name that is not familiar to them, not in their system.” As far as financing, Japan Car FL works with several companies that make loans on Kei trucks.

Even as states struggle to decide exactly what a Kei truck should—or should not—be allowed to do, there will likely still be a market for them, if for no other reason than because they are reasonably affordable. And cute.

Oh, and what’s happening in Rhode Island, where this confusion arguably began? Senator DiPalma is co-sponsoring legislation that would restore the ability of Kei truck owners to register their vehicles, and get license plates. That’s the good news. The bad news for Kei lovers: The new law would only apply to the 30-odd Kei trucks that are already on the road there, for use “until they can’t function anymore,” DiPalma said. There is no provision for adding any new Kei trucks to Rhode Island roads.

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The 1990s were a wild era for sport-utility vehicles. Models like the mid-size Ford Explorer blew open the segment, showing families a fresh alternative to the traditional station wagons and dowdy-but-functional minivans that had taken over as the capacious conveyances of choice. Compact SUVs like the Jeep Cherokee and Chevrolet S-10 Blazer, which had arrived in the mid-1980s, remained popular well into the following decade. Automakers thus found themselves freed from the full-size shackles that had until then dominated the SUV scene, and they were willing to take a chance or two on more small SUVs—even trucklets that trod a much more modest footprint.

Among these market experiments, perhaps the boldest was a gambit from Japanese automakers to sell smaller, “kei”-derived SUVs in America. If the term is unfamiliar, kei cars were born out of rigorous regulations and insurance practices in the Japanese domestic market. The result was a subset of tiny, city-focused autos that ranged from sporty to semi-rugged: box-like vans, gull-winged coupes, and two-door ‘utes were all readily available in Japan at reasonable prices. Despite their shoebox proportions and capped displacements (no more than 660cc for most of the 1990s), kei vehicles proved massively popular and served as the economic bedrock that financed the overseas overtures of numerous pan-Pacific brands.

Slightly puffed-up kei trucks, despite big ambitions, failed to take hold in the Western world. It would take another 20 years or so for Americans to embrace the small, gently lifted trucklets that dominate today’s entry-level market. Despite their legacy of missteps, the original crop of kei-flavored SUVs seems ripe for re-evaluation, especially as auction blocks and online sales platforms are filling up with more JDM metal each year that becomes eligible for import under the 25-year rule.

Suzuki Gets a Head Start

Despite the cute-ute revolution not fully blossoming until the ’90s, the United States had already been the subject of a kei-truck experiment that began midway through the previous decade. The Suzuki Samurai, which arrived as a 1986 model, presented off-road fans with the smallest possible steed for sampling the great outdoors. The Samurai was a rebadged version of the brand’s popular Jimny, a strong-selling kei competitor in Japan.

Measuring 4.5 feet shorter and nearly 2 feet narrower than a contemporary Ford Bronco, and offering a sub-$8000 price tag, the Samurai found a healthy audience with hardcore off-road fans who valued light weight, small footprint, and switchable 4WD transfer case that allowed it to handle challenging trails. The North American engine at launch was a carbureted 1.3-liter, 63-hp four-cylinder, rather than the 543-cc and 41-hp mill in the kei-class version. Later, in 1991, Suzuki added fuel injection for North America that ticked output to 66 hp.

Sales neared the 50,000 mark in the model’s first year. The SUV’s raucous reception was soon muted, however, when Consumer Reports flagged the Suzuki’s propensity for rollover accidents resulting from its short wheelbase and narrow track. A libel lawsuit ensued, and while the Samurai remained in showrooms until 1995, the damage to the vehicle’s reputation was done.

Suzuki had significantly more success with its second foray into small SUVs, launched in 1988. The Sidekick was a step up from the Samurai in terms of size, grafting an additional two feet onto its overall length and boosting its track by a foot or so. A new 1.6-liter four-pot engine offered 80 hp. Not only did these moves improve passenger room, on-road stability, and drivability versus the Samurai, but they also attracted a corporate partner with deep pockets: General Motors. GM owned a minority stake in Suzuki at the time and signed on to build and sell a version of the Sidekick called the Tracker, branded with its nascent Geo marque.

Until 1995, the Sidekick/Tracker was sold alongside the Samurai, whose sales dwindled until it went out of production in 1995. The twins were a boon for Suzuki and gave GM access to an entirely new group of customers when the kei trucks were introduced for the 1989 model year. The timing was perfect, as the contemporary fervor for SUVs dovetailed nicely with the Tracker/Sidekick’s affordable price, respectable off-road chops, and livable driving dynamics. It also didn’t hurt that the little SUV was the perfect size to tow behind an RV, serving as a convertible, fun-in-the-sun dinghy with which adventurers could explore beyond campgrounds.

Big Splash, Small Pond

The Sidekick and Tracker initially had zero competition in the United States, as no other subcompact SUVs had yet appeared as of the early 1990s. It wasn’t long before one of the world’s biggest automakers emerged to test similar waters.

Toyota’s cute-ute approach for the first-ever RAV4 took an entirely different tack. Rather than tap into its vast wellspring of off-road acumen, the Japanese automaker instead pursued packaging as the vehicle’s primary strength. The goal was a street-oriented trucklet that was comfortable, spacious, and thrifty while mimicking the style (and open-roofed fun) of the tiny two-door SUVs that came before it.

Toyota took its time to get this formula right. The RAV Four concept was first displayed at the 1989 Tokyo Motor Show, but it wasn’t until four years later that a less Jeep-like, more production-ready version appeared. The vehicle actually went on sale in Japan in 1994, and this “Recreational Active Vehicle with 4WD” arrived on American shores in 1996.

Although a four-door model was available, the two-door (with optional soft top in 1998 and 1999) RAV4 epitomized the kei-like, fun-loving attitude that fed Sidekick and Tracker popularity. Though the RAV4 was dimensionally identical to its tiny-truck rivals, that’s where the similarities ended; instead of body-on-frame construction, Toyota’s urban mini featured a smooth-riding unibody design matched with frugal front-wheel drive. (An available slip-and-grip style all-wheel drive system was also available on the order sheet.)

End of the Era

Although it might have initially felt the beginning of a huge movement, a giant like Toyota jumping into the cute-ute tub ended up sloshing all the water out instead. By the end of the decade, it was clear that most buyers preferred the RAV4’s approach and favored practicality over capability in such thimble-sized sport-utilities. And while off-road specialists like the Jeep Wrangler could thrive in two-door form, four-door sales quickly came to dwarf everything else on the road.

Unfortunately for Suzuki, its third, most ill-fated kei truck did not match the prevailing trends. A would-be replacement for the Samurai, the 1996 Suzuki X-90 occupied nearly the same amount of space but prioritized style over substance. Though it packed a legitimate low-range four-wheel drive system and a tough enough frame, the X-90 was doomed by its unusual two-seat body style that swapped in a sealed trunk for a long-roofed hatch, effectively cleaving its utility and dooming its appeal to only the most daring of motorized toy shoppers. It was gone from showrooms after only three model years.

Sales of the two-door RAV4 never took off, either, compared with the volume success that was its four-door sibling, and Toyota wiped it from the roster amid the RAV4’s 2001 redesign. That left only the Tracker (eventually wearing a Chevy badge) and the renamed Sidekick (now the Vitara) to continue the short-wheelbase crusade, although each did gain a long-wheelbase/four-door variant to meet obvious demand. Both were gone after 2005.

GM’s S10 Chevy Blazer and S15 GMC Jimmy, larger two-door stalwarts, also faded away after 2005. That left the Jeep Wrangler as the last two-door SUV standing in North America, reigning as the truncated utility king with very few challengers real until the arrival of the recently revived Bronco and Defender. Even the Wrangler, however, adopted a four-door model (dubbed Unlimited) with the 2007-model-year JK generation. Today, the overwhelming majority of Wranglers, Broncos, and Defenders sold come with four doors.

Opportunity Knocks (At Knee-Level)

Thanks to the roving 25-year import window that JDM vehicles from the kei car heyday finally legal, collectors are taking major interest in tiny tots like the Mitsubishi Pajero Mini and the original Suzuki Jimny, alongside adjacent utility-friendly rides such as the Nissan S-cargo and the Subaru Sambar vans. They join a chorus of imported roadsters (Honda Beat, Suzuki Cappucino), hot hatches (Suzuki Alto Works) and mini-exotics (Autozam AZ-1) serving Rad-era enthusiasts with a taste for once-forbidden fruit. Yearly U.S. imports for the Pajero Mini and Jimny, for instance, have more than doubled since 2020.

Will that attention soon toward inward, back at the Samurai, Tracker, Sidekick, and RAV4? Values of models like the Samurai have remained attainable even as other classic SUVs see their price tags climb skyward, and the market for clean Trackers, Sidekicks, and RAV4s is in a similar state. Prized by their devoted fan bases but for the most part ignored by mainstream collectors, these American-market, almost-kei trucklets offer the chance to get into a cute-ute without the added step of importation.

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It looks like a compilation of ’80s supercars that went through the dryer too long, or a Micro Machine brought up to human scale. But it’s neither. It’s the Autozam AZ-1, and this one sold on Cars&Bids this week for $27,693. It’s an odd duck, but it’s that special, endearing kind of odd. And as strange as it is, the AZ-1 is actually a spunky little sports car that everyone should know about.

To enthusiasts, the AZ-1 is known as one of the “A-B-C” cars, consisting of the Autozam AZ-1, Honda Beat, and Suzuki Cappuccino. This fun-sized sports car trio falls into Japan’s Kei category, and they were specifically built for, and sold in, their home country. Cars in the Kei class have regulation-limited exterior dimensions, a maximum engine displacement of 660 cc, and are the smallest road-legal cars for the Japanese market. A Kei-class sports car like the AZ-1 isn’t going to take down an NSX or a GT-R, but that’s hardly the point.

The point, of course, is cheap thrills. But just because they’re cheap doesn’t mean that they’re cheaply built or engineered. Quite the opposite in fact. Though these cars fit into the Kei niche, from the outset they were meant to be legitimately fun sports cars. Each of the three A-B-C cars has its pros and cons, but it’s clear that the AZ-1’s designers had the most fun with the looks. While the Honda Beat and Suzuki Cappuccino took a more conservative approach styling-wise, Autozam went full bonkers with the AZ-1.

Before we get any further, what is “Autozam,” anyway? Fair question, since we never got them on our shores. A sporty sub-brand of Mazda, Autozam was sort of like what Scion was to Toyota in that it offered a slightly sportier, cheaper, and more youth-oriented alternative to its parent company. As for the AZ-1, it came out of a partnership with Suzuki, who actually did much of the design and engineering of the car, even providing the turbocharged 3-cylinder engine out of its Cappuccino and mounting it in the middle. About that engine: while Kei cars capped their horsepower ratings at 64 horsepower, it is rumored that the Autozam’s engine cracked triple digit territory in reality.

Of the ABC cars, the AZ-1 was by far the worst seller at just under 4400 units, with another 531 badged as the Suzuki Cara. For comparison, Suzuki sold more than 28,000 Cappuccinos and Honda over 33,000 Beats. It is easy to see why, the AZ-1 is wildly impractical, has zero storage room and is tiny inside. At 6 foot 5 inches tall, your author has had to do a yoga routine just to contort himself behind the wheel. But once you are there, it’s zippy and handles like the big go kart it pretty much is. It’s a blast.

Which might be why this one has covered 126,000 kilometers (78,300 miles), quite a bit for something so small and impractical and certainly on the high side compared to other AZ-1s sold recently. Yet its nearly $28K price is comparable to what other, lower-mile Autozams have brought. It wasn’t long ago that these were significantly cheaper. One did sell for $35,530 in 2021, but after the A-B-C cars became eligible for import in the mid-2010s, prices under $20K and well down into the teens were the going rate until recently.

But don’t get me wrong, even in the $20K-$30K range it still falls into the affordable category by today’s standards, especially in terms of fun and rarity per dollar. What else makes such a statement rolling down the road? Then, when you stop, it’s a sure conversation starter. And the best part is that it isn’t pretentious—it’s impossible for something this tiny and cute to be snooty. It’s just a cool, fun, smile-inducing automobile with neat history behind it. It just screams “I’m the funkiest and quite possibly most interesting car in the lot,” and that is reason enough to have one.

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We don’t pretend to have a crystal ball at Hagerty Insider. At this time last year, for instance, none of us would have forecast that land war would break out in Europe and dramatically impact energy costs and supply chains.

That said, we do have a lot of data, as well as analysts who spend all day, every day, following the gyrations of the collector car market. That in mind, we put them on the spot and asked them to proffer predictions for 2023.

And in case you think we’ll let any of our team forget these come December, check out how we scored last year’s predictions.

1. A Ferrari will sell for $40M+.

With Michael Mann’s Ferrari movie coming out in 2023, the marque’s return to Le Mans as a factory team, and a 250 LM consigned to the Rétromobile auctions in February, it could be a big year for Ferraris at auction. —John Wiley, manager of valuation analytics

2. Classic-car imports from Europe (and particularly the U.K.) will continue to surge.

Even though the British pound has recovered somewhat from a summer downturn that saw it briefly drop to near parity with the dollar, the economy in the U.K. remains in the doldrums. With the war in Ukraine grinding on and continuing to drive up energy costs, it might be unfashionable (to put it mildly) for enthusiasts on the Continent to add to their collections. American collectors may well fill the vacuum, as they did at many of the late-summer and fall auctions in the U.K. —Adam Wilcox, information analyst

https://datawrapper.dwcdn.net/YmD10/1/

3. The average value of a collector motorcycle will surpass $10k USD for the first time ever.

Appreciation in the Hagerty Motorcycle Price Guide accelerated in 2022, with the average dollar value of a #3 motorcycle increasing four times more than during the previous year. As motorcycles enter further into the mainstream collector hobby and even make inroads in the the art world, expect this appreciation to continue. —James Hewitt, senior information analyst and editor of the Hagerty Motorcycle Price Guide

4. Appreciation for lower-priced (< $250K) vehicles will slow in 2023, while $1M+ vehicles will appreciate faster.

During the pandemic, prices for mainstream collector cars increased dramatically. Inflation and economic pressures slowed that growth in 2022. Reserves for mainstream vehicles became less common in 2022, which suggests weakening demand. Expect that to carry into 2023 as the Federal Reserve’s effort to tamp down inflation continues to cool consumer activity. In contrast, top-tier classics tend to behave differently. Their appreciation sped up later in 2022, and likely will continue to perform well in 2023. —John Wiley

5. An ABC kei car will sell for over $50,000.

For those who don’t know, the ABC kei cars are a trio of sporty pint-sized cars built for the Japanese domestic market—the Autozam AZ-1, Honda Beat, and Suzuki Cappuccino (the latter is a member of the 2023 Hagerty Bull Market List). The current record for a member of the trio is a 1993 Autozam AZ-1 that sold for $35,530 in September 2021. Buzz around these cars has continued to grow, and if a clean example of the rare Mazdaspeed or M2 1015 versions comes to auction, it could surpass $50,000. —Adam Wilcox

6. No NFTs will sell at a collector car auction

Crypto isn’t disappearing entirely from the collector car hobby, but given the drama and dropping values in the world of digital currencies, expect the experiments selling non-fungible tokens to end for now. —Adam Wilcox

7. Online auction growth will continue to slow.

Last year I incorrectly predicted that that online auction sales would double sales in 2022; they saw “only” a 45 percent increase. With the bidding frenzy of last summer seemingly past us, I expect that growth to slow even more, to less than a third. Mind you, that would still be $2 billion for the year—more than 10 times the online total just five years ago. —John Wiley

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Honda’s smallest sports car, the S660, is to end production, but it’s not going without a fight. The final edition will be its most racy ever.

The S660 was launched in 2015 as a tribute to the Honda S500 of 1963. That car was a cute coupe or convertible powered by a tiny 531cc four-cylinder engine, with four carburetors, that would rev to a heady 9500 rpm—just like Honda’s motorcycle motors. Although it only mustered 44 horsepower, the S500 was a featherweight at 1500 pounds and could reach 80 mph. The S500 featured a bike-style chain drive to the rear wheels and independent suspension all around. Honda followed up with the more sophisticated S600 (below) and S800, and the Beat of the early 1990s. The ultimate S-car was, of course, the 1999-2009 S2000, by which time it had grown in stature considerably.

When the S660 brought back the badge it was a return to its roots as a kei car. The two-seater roadster was just 134 inches long and 58 inches wide. It weighed a scant 1870 pounds and positioned its turbocharged 660cc, three-cylinder engine amidships. Power was restricted to 63 hp and it could be had with either a six-speed manual or a CVT transmission. It’s a joyous little thing, but hardly a serious performance car.

Honda has announced the demise of the S660 by 2022 and the final Modulo X Version Z not only has the longest name of any kei car that we can think of, it comes with a striking red and black synthetic leather cabin, suede-style door trim, special badging, and a custom center bag inside. It’s painted in Sonic Gray pearl and wears stealth black 15-inch alloy wheels, unique black badges, and a special active rear spoiler with a gurney flap, which is definitely more for show than go.

The Modulo X Version Z costs a far-from-diminutive 3,150,400 yen in Japan ($28,854), but if you want to zip through the streets of Shibuya in style then it’s a cool choice and we’ll miss it when it’s gone.

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Possibly the largest single-year valuation increase we will ever see for a classic car is for a … Subaru 360?

In the matter of just a year, the Subaru 360 has quadrupled in value. In January 2020, the value for an Excellent (#2) condition 1969 Subaru 360 Sedan was $10,100. Now, just a year later, that same microcar is worth $44,300. One look at the historical pricing on Hagerty Valuation Tools shows how dramatic of an increase we are witnessing.

A little over a year ago, in November 2019, a yellow 1970 Subaru 360 Deluxe in great condition sold on Bring a Trailer for a modest $8500, right between our #2 (Excellent) and #3 (Good) condition values at the time. Then, less than a year later, in October 2020, a 1969 Subaru 360 Deluxe in marginally better condition sold for $50,000 on the same platform. This second sale wasn’t an outlier, either: two other Subaru 360s sold for over $30,000 that same month at RM’s Elkhart auction.

Certain cars are famous for mobilizing the masses, and they are often especially beloved in their home countries. Germany has the Volkswagen Beetle, France the Citroen 2CV, Italy the Fiat 500, and in the United States, we have the Ford Model T. For Japan, it’s the Subaru 360—affectionately nicknamed the “Ladybug.”

The 360 was Subaru’s first production car and Japan’s first mass-produced Kei car—a class formed specifically to provide inexpensive city cars for the working class. In 1955, Kei car engine displacement was capped at 360 cubic-centimeters, and just three years later Subaru dominated the class, selling nearly 400,000 examples between 1958 and 1971. Weight was kept low by means of a thin steel monocoque chassis and fiberglass roof, which helped make up for the meager 16 horsepower from the 360’s rear-mounted, 356cc two-stroke vertical-twin engine. The Subie also featured a four-corner independent torsion bar suspension, with finned brake drums bolted directly to the 10-inch steel wheels. Although it looks very basic, the 360 was fairly advanced for its time.

The 360 was a versatile platform offered in a variety of body styles, all conforming to Japanese Kei car regulations. The most popular of these variants was the two-door hardtop sedan (roll-back convertible top was optional), followed by a five-door “Sambar” van. For light utility purposes, a ramp-side truck was offered starting in 1961. Briefly, in Japan, Subaru offered a station wagon called the “Custom.”

For a hipper audience, Subaru made the “Young S,” which featured a slightly upgraded 25-horsepower engine, an extra transmission gear, bucket seats, tachometer, and a dented roof for a surfboard. An even “faster” version never offered in North America called the “Young SS” had all the modifications of the Young S with a dual-carb version of the 360 engine producing an impressive 36 horsepower. That’s 100 horsepower per liter! Watch out, Honda S2000!

The little Subie was underappreciated from the moment it arrived on American soil.

In 1968, Malcom Bricklin (of Yugo and SV-1 fame) and Harvey Lamm founded Subaru of America and imported 10,000 Subaru 360s to fill dealerships. The U.S.-market 360 was an improved version of the original sold a decade earlier in Japan. Engine output was increased to 25 horsepower and an overdrive fourth gear was added to the manual transmission, as with the Young S. An optional “Autoclutch” system eliminated the clutch pedal and operated the clutch automatically with an electromagnet. Gone were the days of pre-mixing oil using the fuel cap as a measuring cup, the new “Subarumatic” lubrication system mixed oil automatically from a reservoir in the engine compartment.  Like the Model T, you could have any color you’d like—as long as it was white with a red interior. The Subaru 360 was advertised as “Cheap and Ugly,” with the $1297 price ($9850 in 2020 dollars) and 66 mpg as the main selling points. American’s didn’t care about fuel economy just yet, and the Ladybug flopped. Subaru’s roaring success these days all happened after a seriously rocky start.

In a period review, Consumer Reports saw the need for a small economy car in America but ultimately branded the 360 as “not acceptable” for American roads because of its poor safety standards and blatant lack of power. The publication claimed the car could not hit 60 mph on its test track, and it managed to clock a 37.5 second 0-50 mph time. For context, a 1968 Volkswagen Beetle could make the 0-50 sprint in 14.5 seconds. To give you muscle car fans a laugh, the CR testing crew managed to run the quarter mile in 28.5 seconds at 47 mph. You wouldn’t want to go much faster, anyway; the rear-hinged doors were known to fly open in high winds.

The brake system was the only thing worthy of praise, though the suspension setup caused the car to dive tremendously under light braking. “Just driving straight down an open road could be unsettling,” CR concluded.

On top of that, the 360 wasn’t as care-free as it appeared. According to the user manual, the break-in period suggests the driver never exceed 45 mph for the first 1200 miles and, although two-stroke motor oil was rarely available at gas stations, only one brand should be used for the life of the vehicle. In normal American driving conditions, the Subie only managed 25 to 35 mpg—nearly half what was advertised.  The discrepancy is likely due to the car being designed for a Japanese city where speed limits rarely exceed 25 mph and average commutes are less than 10 miles.

More than anything, collision safety was a concern. Imagine a crash between this little Subaru and any 1970s American car. The driver of a Cadillac Coupe DeVille wouldn’t even notice. How did the 360 make it past American vehicle requirements in the first place? Due to a loophole, the sub-1000-pound curb weight made the 360 exempt from federalized safety standards. Bricklin, though, installed seatbelts to give some sense of safety. After its review, Consumer Reports suggested the National Highway Safety Bureau should remove the 1000-pound exemption from its safety standards.

Ultimately, a Volkswagen Beetle was only $400 more and superior in most respects. The American public agreed, and dealers were stuck with unsold 360s for years. Some even offered “buy one, get one free” deals to clear inventory. It’s rumored that unsold Subarus were loaded on a barge and pushed overboard to create an artificial reef off the California coast, but that probably didn’t happen. More than a few likely ended up being converted to go-karts at the hands of Bruce Meyers (of Meyers Manx fame) to be used at “FasTrack”, Bricklin’s next venture.

So, why the sudden Subie fever?

Modern Japanese classics are becoming a lot more valuable as of late, and in an age of nostalgia, collectors will look for deals in a marque’s earlier work. The 360 founded Subaru and is the company’s only car that many would consider “classic” (most legendary Subarus were made post-1980), so it likely strikes a chord with Subaru enthusiasts—a group that grows larger every year. The same thing is happening to early Hondas. The S600/S800 of the 1960s was Honda’s first production car sold in America, and it recently made the 2021 Hagerty Bull Market List.

Thanks to the passage of time, the flaws that made the Subaru a failure as a new car can now be appreciated as the early missteps of a nascent brand. When you look at other oddball microcars of the era, its amazing the Subaru 360 was ever priced under $10,000. An Excellent (#2) condition 1960 BMW Isetta 300 is $36,200. A 1964 Messerschmitt KR200 in similar condition is $53,600. Even at its current value of $44,300, the Subaru 360 seems like a steal compared to a 1963 Fiat 500 Jolly at $64,700.

Like the Jolly, maybe the yacht crowd is buying them up. The Subaru commercial below hints at that fact … maybe.

As a historically important vehicle, all of this attention tells us that the 360 is finally getting the warm welcome it hoped for, albeit 50 years too late.

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Daihatsu has previewed five crazy kei car concepts ahead of its home auto show. The 2021 Tokyo Auto Salon is set to take place from January 10–17 and Daihatsu’s stand will be a “Village Colorful Carnival” featuring heavily modified versions of its popular city cars and vans.

First up is the Copen Spyder Ver (top), which takes the cute little roadster, throws out its fabric roof and chops the windshield down for a sportier look. The Copen is lowered and features twin aerodynamic nacelles behind the seats.

The Thor Premium Ver is a boxy mini minivan with a custom teal and silver two-tone paint job, bigger wheels, side skirts and front spoiler.

The Taft Crossfield is a rugged, lifted version of Daihatsu’s little crossover, complete with nudge bars, winch, light bar and roof rack. Bash plates are fitted underneath and chunky off-road tires are added to create a tiny adventure vehicle.

For a night under the stars you’ll want to take the Hijet Jumbo Camper Ver which appears to have a tent on the bed of this cute commercial vehicle.

Finally, saving the weirdest ‘for last, is the Hijet Jumbo Sportza Ver, because who wouldn’t want a spyder-style pick up with racing livery, red wheels, and a side-exit exhaust? Never change, Tokyo show.

The post Dinky Daihatsu kei cars take center stage at 2021 Tokyo Auto Salon appeared first on Hagerty Media.

Think of your ideal sports car. If you’re anything like Colin Chapman, low curb weight will be top priority, so let’s shoot for under 2000 pounds. Rear-wheel-drive and a manual transmission are, obviously, a must. Four-wheel independent suspension and a limited-slip differential would be nice. I’m a fan of guilt-free driving; is Prius-level fuel economy out of the question? What about a 9000-rpm redline? Why not go for broke and shoot for a budget under $20,000?

Amazingly, three of these dream cars exist: the Autozam AZ-1, the Honda Beat, and the Suzuki Cappuccino. Otherwise known as the A-B-C kei cars.

So, why hasn’t everyone traded in their Corolla for one of the ABCs? There’s a catch. Even for sports cars, they’re wildly impractical.

Kei cars and the birth of the ABCs

Kei cars are the smallest highway-legal passenger cars in Japan, a land of already small vehicles. To benefit from lower tax and insurance fees, limits are placed on the exterior dimensions and engine size of kei cars. From 1990 to 1998, when the ABC cars were produced, kei cars were limited to 10.8 feet long, 4.6 feet wide, and 6.6 feet high—just barely larger than a golf cart. Think about how small the 2008 Smart ForTwo looks on American roads. To give you an idea, our Smart car was about half-a-foot too wide to be classified as a Kei car.

The kei class has been around since 1949 and very few examples have ever been sold in the U.S. One of the first microcars to cross the Pacific and sell in “big” numbers was the 1958–71 Subaru 360. Starting in 1968, ten thousand of these 900-pound, 25-hp Subarus were imported to the U.S. by Malcolm Bricklin. The 37-second 0-60 time, combined with concerns over its ability to survive a crash against any American car, made buyers think twice about buying it in any significant volume. (Bricklin was obsessed with safety while designing his own car just a few years later.) The Subaru 360 flopped, and it is rumored that unsold units were pushed off barges. One day, someone diving in search of pirate treasure is in for a real head-scratcher.

In the late 1940s, kei engine displacement was initially capped at 150 cc for four-stroke engines but gradually increased over the years. In 1990, displacement increased for the last time—to 660 cc—and with it came the first official power limit. The Ministry of Transportation anticipated manufacturers were getting too tricky with forced induction and capped output at 63 horsepower. This might not seem like much, but remember these are only 0.66-liter engines; that’s nearly 100 horsepower per liter!

During Japan’s booming late-1980s economy, these three funky little sports cars were developed to take advantage of the bigger engines.

1991-1996 Honda Beat

While the rest of the world was buzzing backroads in pint-sized sports cars, America had to wait until May 2016 to import the earliest of the ABC kei cars: the Honda Beat.

The Beat originated as a Pininfarina design and was the last project approved by company founder Soichiro Honda prior to his passing in 1991. (It was a ceremonial gesture, since he was retired almost two decades earlier.) The Beat was targeted at 1990s Japanese youth, which helps explain the zebra-print seats and floor mats. Maybe you had to be a 20-something in 1990s Tokyo to understand what this Beat commercial meant, because I don’t.

The gauge cluster looks like it was stolen from a motorcycle and is a fitting tribute it the Beat’s very motorcycle-like engine.

The 656cc SOHC inline-three features four valves per cylinder and a MTREC (Multi Throttle Responsive Engine Control) system that continuously modifies the air-fuel ratio of individual cylinders based on engine speed. The three individual throttle bodies, one for each cylinder like in the McLaren F1, gives the Beat sharper throttle response while still maintaining a stable idle.

The Beat’s engine is over-square with a stroke ratio almost as high as a Honda S2000 AP1. Much like the AP1, the 63-horsepower peak hits at a lofty 8100 rpm and what little torque it has lives high in the rev range (44 lb-ft at 7000 rpm). That leaves a very narrow peak power band before the 9000-rpm redline. To accommodate, you’ll find yourself frequently hammering the Beat at full throttle. With an open top, five-speed transmission, and the engine mounted directly behind the driver, who could complain?

All-out speed isn’t everything, of course. The Beat is best on tight backroads. At 1675 pounds it’s the heaviest of the ABCs but still tremendously light. The 90-inch wheelbase is stretched to the corners, leaving overhangs smaller than that of a classic Mini. Four-corner MacPherson struts and a 43/57 rear-weight bias makes turning feel instantaneous. Starting in 1993, the rare Version Z offered optional ABS and a limited-slip differential.

If any cars fits the cliché of handling like a go-kart, it’s the Beat. The overall width is well under 5 feet, which gives the driver more than enough room to hit the apex without leaving their lane.

The Beat was an early favorite among JDM microcar enthusiasts in America. Maritime imports for the Beat peaked early, while it was the only ABC car legal for import. As more Cappuccinos and AZ-1s were made available, Beat imports dropped sharply and are now imported less frequently than the Cappuccino, which was produced in similar numbers.

What caused the Beat to lose popularity?

Gary Duncan of Duncan Imports, the largest JDM dealer in the country, has some theories. “Part of it, I think, is the Beats just have no power. But more than anything else, we’re starting to shy away from them because it’s hard to get parts.”

The Beat’s engine was only shared with one other Kei car, the Honda Today, making part availability sparse. To rub salt in the wound, once parts are found, the trunk needs to be removed to access the engine. Even then, it can be hard to reach.

However, these downsides don’t scare the faithful. The Beat has all the ingredients of a classic Honda: supreme handling, perfect shifting, and a high-revving naturally-aspirated engine that makes more power than expected thanks to fancy fuel/air mixing technology. Duncan went on to say, “The Honda badge helps sell. You still got some Beat purist out here.” Beat imports are kept afloat by these Honda fanatics.

Honda built just over 33,600 Beats during a five-year production run, making it the most common of the group; the Suzuki Cappuccino follows with just over 28,000. Expect to pay between $7000 and $9000 for a Beat in good driver condition.

The Honda Beat is a great car on its own, and the decreased popularity might have less to do with its inherent flaws and more to do with the competition.

1991-1998 Suzuki Cappuccino

The Cappuccino became legal in October 2016—just 5 months after the Beat—and is possibly the most under-appreciated of the three. (And my favorite.)

The Suzuki Cappuccino has the most classic sports car layout of the three ABCs. The engine is mounted longitudinally ahead of the driver but behind the front axle, achieving 50/50 weight distribution. Power is sent to the rear wheels through a five-speed transmission. Four-corner multi-link suspension keeps the Capp planted when blasting tight back roads. It’s like a Mazda Miata that was left in the dryer, if that Miata was also turbocharged to a specific output of 100 horsepower per liter.

A Cappuccino in decent condition can be found between $8000 and $10,000. Many ABC buyers will cross-shop the Capp and Beat, since both are convertibles and similarly priced, but the Capp’s engine addresses many of the Beat’s potential issues.

The Suzuki-built “F6A” 657cc DOHC turbo-triple is shared with many Kei cars, so parts are readily available. One of the smallest turbochargers ever in a production car helps the Capp reach the 63-hp limit at 6500 rpm with an even 63 lb-ft of torque at 4000 rpm—a 43 percent increase in torque over the Beat. The increased torque and wider power band make the Cappuccino quicker than the Beat, although it still takes about 10 seconds to reach 60 mph, so we’re really comparing apples to … slower apples. More than anything, the front-engine layout means you don’t need to clear your weekend just to change spark plugs.

The powertrain isn’t even the best part. The Cappuccino has a hidden parlor trick, in that the three-piece hardtop can be configured as a T-top, targa top, or full convertible with the rear window lowered. When not in use, the roof panels can be stowed conveniently in the trunk.

Even with the added complexity, the Capp is nearly 100 pounds lighter than the Beat, thanks to aluminum in much of its construction. At one point, it even had an aluminum engine. In 1995, the Capp was given the new all-aluminum “K6A” engine in a mid-model revision dubbed the EA21R. The new chain-driven DOHC turbo-three increased torque to 76 lb-ft at a lower 3500 rpm, making the little Cappuccino even sportier. These later Cappuccinos also saw an optional three-speed automatic and an early iteration of speed-sensing electric power steering. Post-revision EA21R Cappuccinos are legal for import starting earlier this year. If you plan on modifying a Cappuccino, stick with the “F6A” engine as it can hold up to greater modifications. With a little turbo tuning, you could be driving this:

The Cappuccino was the only ABC car to be sold new outside of Japan. Shortly after the car’s release, Suzuki Great Brtain thought the little convertible would be a hit in the land of impractical, small convertibles. However, it wasn’t quite the success the Brits had hoped, and only 1182 Capps were sent their way. One easy way to spot the difference between British and Japanese Cappuccinos is to look at the side indicators: they are flush with the body on the JDM model.

The Cappuccino is often regarded as the most comfortable and practical of the three. The “large” trunk makes it the only ABC you could use to get groceries. It’s an all around great car, and with production numbers almost as high as the Beat, it’s clear why the Capp has lead ABC imports the last two years.

A 1600-pound car three-fourths the size of a Miata isn’t exotic enough for you? What if it had gull-wing doors?

1992-1994 Autozam AZ-1

For most ABC fans, the Autozam AZ-1 is the car to have. Just look at it! It’s like a Micro Machines Ferrari F40.

The main attraction of the AZ-1 is the gull-wing doors, one of the only dozen or so cars to ever have them. When an AZ-1 is parked, doors up, at a car meet it pulls all the attention away from exotics at one-tenth the price.

If you’re unfamiliar with Autozam, it was an affordable sub-brand of Mazda aimed at youth, kind of like Scion was to Toyota. The AZ-1’s Mazda connection runs deep. Toshiko Hirai was selected to lead the project shortly after his team finished the NA Miata. There is even a Mazdaspeed AZ-1.

The AZ-1 checks all the supercar boxes; mid-engine, rear-wheel-drive, crazy doors, functional side vents, four wheel independent suspension, and absolutely no practicality. Unlike the Beat and Cappuccino, there is no trunk. There might be room for an overnight bag behind the seats but it will have to compete with the spare tire, which was originally stored in the “frunk” but moved inside the cabin due to safety concerns.

The AZ-1 has the most cramped passenger compartment of the ABCs. and since there is no open top to relieve claustrophobia, you should try one on before you buy. The 5’11” Jay Leno managed to fit no problem, but he doesn’t look very comfortable.

Really, all the ABC cars are impractical. So, if you are going to get one, why not get the craziest?

Even though it looks like the AZ-1 would be hard to live with, there’s a few things that makes it more manageable than the Honda Beat, its mid-engine competitor. The AZ-1 shares it’s “F6A” turbo-three with the Suzuki Cappuccino, making part availability much better while also solving the Beat’s power issue. An open engine compartment and access panels behind the seats make maintenance a relative breeze.

As expected, output is the same as the Cappuccino: 63 horsepower and 63 lb-ft of torque. At only 1587 pounds, ten pounds lighter than the Cappuccino, the AZ-1 is the lightest of the three. Weight is kept down using fiber-reinforced plastic body panels which won’t rust—a common issue with Beats. When pitted against the Cappuccino, the AZ-1 is quicker around a track, though it was in the hands of “Drift King” Keiichi Tsuchiya:

Sounds amazing, right? So, why haven’t AZ-1 imports increased like the Cappuccino? The answer lies in the production numbers.

Like your author at a party where nobody likes cars, the AZ-1 was the last to arrive and the first to leave. Autozam began production in October 1992, and by 1994 it was gone. The AZ-1 was born at the wrong time. As the Cappuccino and Beat benefited from starting sales before Japan’s “Lost Decade” economic crisis, the AZ-1 hit showrooms right as the recession was in full swing. Suddenly, the wildly impractical AZ-1 seemed like a poor choice when a Miata was just a few yen more. Like the BMW 507, it was too expensive and considered a sales flop in its time.

AZ-1 sales fell far below its 800 per month target and Mazda quickly pulled the plug. Only 4392 AZ-1s were produced, with an additional 531 of the rebadged Suzuki Cara. To help move unsold units, Mazda introduced a couple of special editions.

Around 100 Mazdaspeed AZ-1s were produced which featured a more aggressive hood, front spoiler, and rear wing. All Mazdaspeeds have full red or blue paint jobs; base models are red or blue with grey lower cladding. The handling is improved with a mechanical limited-slip-differential, sportier suspension, front and rear strut bars, and alloy wheels. The powertrain is left mostly stock with the exception of an upgraded air filter and stainless/ceramic muffler.

The 1015 was built by Mazda subsidiary M2 and is the rarest AZ-1. It features a revised front bumper and rear wing, but most notably adds front fog lamps into the hood making the AZ-1 resemble a mini Group B car. Like the Mazdaspeed, they are all one color : white, black, or silver. M2 originally planned to build 50 for the 1994 model year but only sold about 25. The remaining parts were sold individually to cover the brand’s loses.

Rarity often determines value, but more than anything the AZ-1 is just so damn cool. For the price of an AZ-1, you could buy both a Beat and a Cappuccino. A good-condition AZ-1 can be picked up for $15,000 to $20,000, with Mazdaspeed and M2 1015 special editions selling at the top of that range.

Where did the kei sports cars go?

Unfortunately, this was the heyday of the sporty kei car, a segment that was ultimately killed by Japan’s “Lost Decade.” The ABC kei cars have not been lost to time, though. They’ve always had a cult following in Japan, and the excitement has spread to America.

Duncan thinks cars like this are the future. “These automobiles are generational and I’m watching it. I never thought a ‘40 Ford would go down in value because it was ‘the bootlegger’s choice’ and now they are. 1950s cars are going down, too. Now, I’m betting the farm on ’80s-plus models because that’s the generation that’s coming.”

He’s not wrong.

Using Hagerty insurance quotes as a sign of buying interest, the median age of an ABC kei car buyer is 31, which bodes well for future collectibility. In fact, millennials make up 65 percent of ABC quotes. It’s likely there will be a strong market for obscure Japanese cars for years to come. I can see Gen Z taking to these cars, too.

One of the only Kei sports cars made after the 1990s is next on Duncan’s list. When asked about what future imports he’s looking forward to, he said “First thing is going to be a V12 [Toyota] Century. After that, the Daihatsu Copen.” The V12 Century will be legal in 2022, but we’ll have to wait until 2027 for the first-generation Copen.

A spiritual successor to the Beat, the Honda S660, is currently in production and looks amazing. Americans are forced to wait until 2040 to import them. Personally, I can’t wait until the current Suzuki Jimny is legal, but I’ll have grey hair by then.

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