RIP for the Tokyo Motor Show

(Fortune) -- For nearly two decades the Tokyo Motor Show reigned as one of the world's two or three elite auto expositions, drawing daringly original concept cars and spectacular new production vehicles. Top auto executives from three continents prowled the floors to see what their competitors were up to.

This year's show, which opened to the public on Saturday, is pale by comparison. The glamour and glitz of past years is gone and, more important, more business of consequence is being done elsewhere.

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Here are the symptoms of a sickly show:

-- Automakers are holding their important cars out of Tokyo and giving their global unveilings elsewhere. Honda (Charts), which is based in Japan after all, decided to unveil its next-generation fuel-cell car at the Los Angeles show in November.

Nissan (Charts) did take the wraps off its GT-R supercar -- a tasty morsel to be sure, but one that is irrelevant from a profit-and-loss standpoint. Two financially more important vehicles -- the redesigned Murano crossover and Maxima sedan -- were nowhere to be seen. Expect them to turn up in the U.S. later on as well.

-- American auto executives were mostly invisible. In past years, big shots from General Motors (Charts, Fortune 500), Ford (Charts, Fortune 500), and Chrysler strode the floor of the show to illustrate their interest in cracking the all-but-closed Japanese market and burnishing their global credentials.

I remember participating in a press trip some ten years ago that was supposed to signal Saturn's assault on the Japanese market. The battle was over almost before it started. Saturn retreated from Japan in very short order and the Japanese market is still all but closed to outsiders. Tired of banging their heads against the wall, the Detroit Three have moved on to greener pastures in Asia.

-- Even the Japanese automakers seem to have lost interest. Several veteran observers commented on the lack of particularly quirky concept cars that were renowned for their wit and originality, although they never made it into production.

Moreover, the attractive mannequins that used to decorate the exhibit stands and demonstrate the cars were all but absent, giving the show an empty look. One joker cracked that you could almost see sage brush blowing through the under-populated halls.

The decline of the Tokyo show is a symptom of a larger problem -- the shrinking of the Japanese auto market. As analyst Michel Dunne points out, Japanese consumers bought 5.7 million vehicles in 2005 but are expected to purchase only 5.2 million units this year.

By comparison, the China market is exploding, from 5.3 million units two years ago to eight million units in 2007 -- making it the second-largest auto market in the world after the U.S. By 2010, Dunne expects Japan to still be under six million units while demand is China is expected to reach 11. 5 million.

Since Japan remains prosperous, why are auto sales sliding? Well, population growth is stagnant, so new buyers aren't being created. The average age of the population is moving upward, further shrinking the universe of prospective buyers. And younger Japanese seem to have lost interest in cars. According to Dunne, autos are no longer considered cool.

What this means of course is that Toyota (Charts), Honda, Nissan and the others will have to look elsewhere for growth in order to survive and thrive. Already they are stepping up their expansion into the BRIC countries -- Brazil, Russia, India, and China -- and they continue to build their market share in the U.S.

More ominously, the automakers will have to boost their exports. Layoffs are a corporate no-no in Japan, so the companies must find overseas markets for their output if they are to keep their factories running at capacity. With the yen at 114 to the dollar, that's bad news for U.S. automakers.

They've complained for years that the Japanese government keep the yen artificially cheap, and the current exchange rate isn't likely to ease their pain. When Toyota and Co. can compete on price as well as quality and value, that makes them formidable indeed.