Kei car is the smallest category of Japanese, expressway-legal motor vehicles. 'Kei' is diminutive for kei-jidōsha, (kanji: 軽自動車), "light automobile" or "compact automobile" (pronounced [keːdʑidoːɕa]). With restricted dimensions and engine specifications, owners benefit firstly from lower taxes and insurance rates which lead to a lower overall cost of ownership. And in most rural areas, importantly, they were also exempted from the general Japanese shako shōmeisho (車庫証明書) parking-space ownership requirement to legally buy a motor vehicle at all,^{[citation needed]} as street parking is generally restricted in Japan. Japan's carmakers also make microvans and kei trucks within this legal category.

The kei category was created by the Japanese government in 1949, to stimulate both car ownership and growth of Japan's car industry. The regulations were revised multiple times until 1998, but since October 1998, the law consistently specifies a maximum vehicle length, width and height under 3.4 m (11.2 ft), 1.48 m (4.9 ft) and 2.0 m (6.6 ft) respectively, and engine displacement under 660 cc (40.3 cu in). A 'gentleman's agreement' for a maximum power of 64 PS (63 hp; 47 kW) was reached between Japanese automakers and lawmakers.

Kei cars have been very successful in Japan since the 1960s, consisting of over one-third of domestic new-car sales in fiscal year 2016, after dropping from a record 40 percent market share in 2013. To lower the market share of kei cars, Japan increased taxes on the category by 50% in 2014.^[1][2][3] In 2018, seven of the 10 top-selling models were nonetheless kei cars, including the top four, all boxy passenger vans: the Honda N-Box, Suzuki Spacia, Nissan Dayz, and Daihatsu Tanto.^[4]

For exports, the vehicles are generally too small and specialized to be profitable.^[5] Notable exceptions exist, for instance the Suzuki Alto and Daihatsu Cuore, which have been exported consistently from around 1980. The export version of the Suzuki Jimny has become very popular, both in and outside of Japan. Kei cars are both popular with the elderly, but also with youths and younger families because of their affordability and ease of use.^[6]

Nearly all kei cars have been designed and manufactured in Japan, but a version of the German-made Smart Fortwo was briefly imported and officially classified as a kei car. In addition, the British Caterham 7 160 and the Polish Polski Fiat 126p (Maluch)^[7] also received such classification.

Japanese government regulations limit the outer physical size, and (combustion) engine displacement and power output of kei cars, see detailed table below. Kei cars have also been subject to other restrictions, chiefly lower speed limits than bigger vehicles; older Kei-cars also had a warning chime that sounded when being driven too fast.^[8]

Kei cars feature yellow license plates (with black numbers on a yellow background for private use, and yellow numbers on a black background for commercial use), earning them the name "yellow-plate cars" in English-speaking circles.^[9][10]

Modern Kei cars are often available with turbocharged engines, automatic and continuously variable transmissions, and choice of front-wheel or all-wheel drive.^[10] After the 1980s, Kei cars had matured so much in power, speed, and passive (crash) safety, that they were no longer bound to lower maximum speeds than other cars. Japan's carmakers since agreed on a self-imposed maximum 140 km/h (87 mph) speed, mostly because of their narrow width.

Kei cars are often considered the Japanese equivalent of the European Union's^{[citation needed]} A-segment "city cars". However, contrary to Japan's special Kei cars' legal status and limitations, there are no EU- or pan-European legal restrictions, exceptions or benefits for what European auto journalism or market analysts call the 'A' market-segment of motor vehicles. Although some Kei models are successfully exported or licensed, the great majority are designed and built for the Japanese domestic market (JDM) only, as they are entirely optimized to offer the most appealing vehicles within the very specific to Japan Kei-car rules,^[5] in addition to mainly being built with the steering on the right. Contrary to popular belief, according to the 1 January 1990 regulations, there is no official power limit for Kei cars. The limit is dictated by a Gentleman's Agreement between Japanese auto manufacturers as the most powerful Kei car at the time was rated at 64 PS (47 kW; 63 hp). This agreement was reached to prevent a horsepower race, and to remain true to the modest spirit of the Kei class, to charge lower tax on small vehicles that are just enough to meet basic transportation needs.

1958 Suzuki Suzulight SS

The kei legal class originated in the era following the end of World War II, when most Japanese citizens could not afford a full-sized car, though many had enough money to buy a light motorcycle. To stimulate growth of the car industry, as well as offer alternative commuting means, and delivery vehicles for small shops and businesses, the kei-car category, reduced tax-burden, and accompanying legal maximums for "essential transportation" vehicles were created.^[13] At first limited to a displacement of just 150 cc (or just 100 cc for two-stroke engines) in 1949, dimensions and engine size limitations were gradually but swiftly expanded in 1950, 1951, and 1955, to make kei cars more attractive to buyers, and production more viable to manufacturers.

From 1955, the displacement limit increased to 360 cc for both two-stroke and four-stroke engines, resulting in several new kei car models beginning production in the following years. These included the 1955 Suzuki Suzulight^[14] and the 1958 Subaru 360 (considered the first truly mass-produced kei cars),^[15] which were finally able to fill people's need for basic transportation without being too severely compromised. In 1955, the Japanese Ministry of International Trade and Industry (MITI) also set forth goals to develop a "national car" that was larger than kei cars produced at the time. This goal influenced Japanese automobile manufacturers to determine how best to focus their product development efforts for kei cars or the larger "national" cars. The small exterior dimensions and engine displacement reflected the driving environment in Japan, with speed limits in Japan realistically not exceeding 40 km/h (24.9 mph) in urban areas. Kei cars were not allowed to be driven any faster than 40 km/h until the mid-1960s, when the kei speed limit was increased to 60 km/h (37.3 mph). The early vehicles were comparable to the European 'bubble-cars' of the era.

The class then went through a period of ever increasing sophistication,^[16] with an automatic transmission appearing in the Honda N360 in August 1968, and front disc brakes becoming available on a number of sporting kei cars, beginning with the Honda Z GS of January 1970.^[17] Power outputs also kept climbing, reaching a peak with the 40 PS (29 kW; 39 hp) Daihatsu Fellow Max SS of July 1970.^[18] Sales increased steadily, reaching a peak of 750,000 in 1970.

Until 31 December 1974, kei cars used smaller license plates than regular cars, at 230 mm × 125 mm (9.1 in × 4.9 in). From 1975, they received medium-sized standard plates, which are 330 mm × 165 mm (13.0 in × 6.5 in). To set them apart from regular passenger cars, the plates were now yellow and black rather than white and green.

Throughout the 1970s, the government kept whittling away at the benefits offered to kei vehicles, which combined with ever stricter emissions standards to lower sales drastically through the first half of the decade.^[16] Previously exempt, mandatory annual inspections for kei cars were added in 1973 and put an additional damper on sales.^[19] Honda and Mazda withdrew from the shrinking passenger kei car market in 1974 and 1976, respectively, although they both maintained a limited offering of commercial vehicles. Sales had been steadily declining, reaching a low of 150,000 passenger cars in 1975, 80% less than 1970 sales.^[20]

Emissions laws were another problem for the kei car industry in the mid-1970s. From 1973 to 1978, emissions standards were to be tightened in four steps.^[21] Meeting the stricter standards, which were to be introduced in 1975, would be problematic for manufacturers of kei cars. This was particularly hard for Daihatsu and Suzuki, which focused on two-stroke engines, and especially Suzuki, a relatively small company whose entire lineup consisted of two-stroke kei cars.^[22] Daihatsu, though, had both the engineering backing and powerful connections of their owner, Toyota, to aid them in meeting the new requirements. All manufacturers of kei cars were clamoring for increased engine displacement and vehicle size limits, claiming that the emissions standards could not be met with a functional 360-cc engine. In the end, the Japanese legislature relented, increasing the overall length and width restrictions by 200 mm (7.9 in) and 100 mm (3.9 in), respectively. Engine size was increased to 550 cc, taking effect from 1 January 1976.^[22] The new standards were announced on 26 August 1975, leaving very little time for manufacturers to revise their designs to take advantage of the new limits.^[23]

Most manufacturers were somewhat surprised by the decision; having expected a 500 cc (30.5 cu in) limit, they had already developed new engines to fit such restrictions. These new engines were quickly introduced, usually mounted within widened bodies of existing models.^[20] These interim versions, with displacements ranging between 443 and 490 cc, were "feelers", developed to see if a continued market existed for the kei car.^[20] As sales improved, these engines only lasted for a model year or so until manufacturers had the time to develop maximum-sized engines. Only Daihatsu had a 550 cc engine ready and thus avoided developing transitional engines that did not immediately take full advantage of the new regulations. Kei car sales remained stagnant, however; while combined passenger and commercial kei car sales reached 700,000 for the first time since 1974,^[21] the small cars still lost market share in a quickly growing market.

As the kei cars became larger and more powerful, another benefit appeared as exports increased considerably. In particular, export sales of kei trucks increased, while kei passenger car exports increased at a lower rate. In 1976, the number of exported kei cars and trucks combined was 74,633 (up 171% year-on-year), despite exports of passenger kei cars decreasing.^[24] In 1980, another record year occurred as exports grew by 80.3% (to 94,301 units), of which 77.6% were microtrucks.^[25] Nearly 17% of exports went to Europe, dwarfed by Chile, which took nearly a quarter of the exported kei vehicles.^[25]

Due to the difficult economic environment, low-priced cars sold well at the turn of the decade; 1981 marked another successful year as Japanese kei car sales reached their highest since 1970 (at 1,229,809 units for cars and trucks).^[26] This was also thanks to a new phenomenon: To help boost their sales, Suzuki developed a new car which could be sold as a commercial vehicle although it was really intended for private use, thus avoiding the 15.5% excise tax. Efficient, bare bones design meant that the resulting Suzuki Alto was considerably cheaper than any of its competitors, and it set the tone for kei cars for the entire 1980s. Until the excise tax was abolished in 1989, light commercials like the Alto and its competitors nearly completely supplanted the passenger car versions.^[19]

As the 1980s progressed, kei cars became increasingly refined, losing their utilitarian origins, as Japanese customers became ever better off. Features such as electric windows, turbochargers, four-wheel drive, and air conditioning became available on kei-car models. Conversely, van versions of kei hatchbacks were now marketed to non-business customers to take advantage of even lower taxation and more lenient emissions rules; this move in the market was spearheaded by Suzuki with their 1979 Alto, and competitors soon followed suit, with the Subaru Family Rex and the Daihatsu Mira appearing within a year's time.^[27]

In the 1980s, the speed limit for kei cars was 80 km/h (50 mph). Government rules also mandated a warning chime to alert the driver if this speed was exceeded.^[8]

The kei car regulations were revised in March 1990, allowing engines a displacement increase of 110 cc (6.7 cu in), or twenty percent, while the maximum length was increased by 100 mm (3.9 in). These changes occurred during the 1990s Japanese economic bubble, and all manufacturers quickly developed new models to suit. Within five months, all major kei models had switched from 550 cc to 660 cc engines.^[28]

For the first time, a power limit of 64 PS (47 kW; 63 hp) was also applied in addition to the limit on engine size, in response to the ever-increasing power outputs available with turbocharging and multivalve technologies popularized in the late 1980s. Engine technology was also shared with sports bikes, which are designed more for rider enjoyment and less so for fuel economy, going against the idea of small people's cars and putting the kei cars' tax and structural advantages at risk of a governmental backlash. This power limit matched the highest output reached by any kei manufacturer at the time and was a gentlemen's agreement amongst the manufacturers in an effort to avoid a kei-class horsepower war. The only kei car to have exceeded this limit is the Caterham 7 160, a lightweight British sports car that was not expected to qualify as a kei car, though it is small enough (in dimensions and displacement) to fit the regulations. Its engine is rated at 80 hp (60 kW; 81 PS)—since that is how the car is homologated in the United Kingdom, Japanese authorities told the importer that its power should remain unchanged.^[29] The Japan Automobile Manufacturers Association also self-imposes a speed limit of 140 km/h (87 mph) for kei cars.^[30]

In a rare example of an overseas mass-produced model being sold as a kei car in Japan, a kei version of the Smart Fortwo (called the Smart K) was sold in Japan by Yanase from 2001 to 2004. The Smart K used revised rear fenders and reduced tire dimensions and track width to conform to kei regulations.^[31] The model was not a success, and sold the fewest examples of a kei car when it was marketed.^[10]

The Suzuki Wagon R was the best-selling kei car in Japan from 2003 to 2008.^[32] Starting in 2011, Toyota entered the kei car market for the first time. The resulting Toyota Pixis Space, a rebadged Daihatsu Move Conte, was expected to increase competition in that market.^[33] Nissan and Mitsubishi began to jointly produce the Mitsubishi eK (also sold as the Nissan Dayz and formerly the Nissan Otti). Honda's kei car lineup—the N-one, N-Box, and N-WGN—accounts for around a quarter of its overall sales.^{[citation needed]}

In April 2014, the Japanese government significantly reduced advantages for kei car owners, imposing a higher sales tax, a higher gasoline tax, and a higher kei car tax, the last of which was raised by 50 percent—greatly reducing tax benefits compared to regular-sized cars.^[2]

Daihatsu, Honda, Suzuki and Nissan-Mitsubishi (through the NMKV joint venture) are currently the only mass-production manufacturers of kei cars. Mazda sells rebadged Suzuki models, Toyota and Subaru sell badge-engineered Daihatsu models, and Nissan-Mitsubishi sources their commercial kei models from Suzuki.

The electric version of the Mitsubishi i, the Mitsubishi i-MiEV was the first electric kei car. This was launched for fleet purchasers in 2009 in the Japanese domestic market. It became available to the wider public as well as the global market in 2010.^[34] The i-MiEV uses a 47 kW (63 hp) permanent-magnet synchronous motor powered by a 16 kWh lithium-ion battery pack.^[35] It can charge overnight in 14 hours from home 100-volt mains, or in 30 minutes from quick-charging stations installed at fleet locations. Its range is 100 km (62 mi) as tested by the US EPA, and 160 km (99 mi) as tested by the Japanese Transport Ministry. It was the world's first mass-produced electric car, and the first electric car to sell more than 10,000 units.^{[36][37][3][38]}

Rebadged and slightly updated variants of the i-MiEV were also sold in Europe as the Peugeot iOn and Citroën C-Zero. In 2011, Mitsubishi launched the MINICAB-MiEV; a battery electric version of the Minicab microvan, borrowing the drivetrain and key components from the i-MiEV.^[39][40] As of March 2015, over 50,000 units across all variants (including the two minicab versions sold in Japan) have been sold worldwide since 2009.^[41] Production of the i-MiEV was discontinued in 2021.

In May 2022, NMKV launched the Nissan-badged Sakura and the Mitsubishi-badged eK X EV in the Japanese domestic market. These models have a 20 kWh lithium-ion battery pack with an estimated WLTC range of 180 km (110 mi). Both use a single electric motor with a maximum output of 47 kW (63 hp; 64 PS). The eK X EV is a battery-electric version of the Mitsubishi eK X, and the Sakura is an update to Nissan's Dayz line. The two are eligible for EV purchase incentives in Japan, and as of June 2022, are also the cheapest new BEVs from a major Japanese manufacturer.^[42][43][44]

The vehicle excise tax levy is 2% of the purchase price, compared to 3% for a regular car.^[45] A 24-month insurance contract typically costs ¥18,980 at the time of registration versus ¥22,470 for a larger car.^{[citation needed]}

An automobile weight tax also is levied: The amount is ¥13,200 and ¥8,800 for a three- and two-year period, respectively, as compared to the ¥18,900 and ¥12,600 charged for larger-sized passenger cars. The savings are thus more than 30% in both cases. This weight tax is paid after the vehicle has passed its safety inspection. The required road tax is based on the engine's displacement.

• 
  Subaru 360
  (1958–1970)
• 
  Mazda R360
  (1960–1969)
• 
  Daihatsu Fellow
  (1970–1976)
• 
  Honda N360
  (1967–1972)
• 
  Honda Life Step Van
  (1972–1974)
• 
  Suzuki Fronte Coupé
  (1971–1976)

• 
  Mitsubishi Minica
  (1962–2011)
• 
  Suzuki Cervo (exported as the Suzuki SC100)
  (1977–1982)
• 
  Subaru Sambar
  (1961–present)

• 
  Autozam AZ-1
  (1992–1994)
• 
  Honda Beat
  (1991–1996)
• 
  Suzuki Cappuccino
  (1991–1998)
• 
  Honda S660
  (2015-2022)
• 
  Daihatsu Copen
  (2002–2012, 2014-present)

• 
  Honda N-One
• 
  Mitsubishi eK X space
• 
  Suzuki Wagon R
• 
  Nissan Dayz
• 
  Mazda Carol
• 
  Toyota Pixis Joy

• Kei truck

• Rees, Chris (1995). Microcar Mania. Minster Lovell & New Yatt, Oxfordshire, UK: Bookmarque Publishing. ISBN 1-870519-18-3.
• 360cc: Nippon 軽自動車 Memorial 1950→1975 [Nippon Kei Car Memorial 1950–1975] (in Japanese). Tokyo: Yaesu Publishing. 2007. ISBN 978-4-86144-083-0. OCLC 675044530.

• Media related to Kei cars at Wikimedia Commons