Japan`s barriers to American cars may be coming down a little, but a question remains: Does Detroit make anything the Japanese want to buy?
One industry analyst answers the question with one word: ”Nope.”
Other auto industry observers say the Japanese think American cars are not fashionable, poorly built and unsuitable for Japan`s driving conditions.
The U.S. sold about 30,000 vehicles in Japan last year. Half of them were Honda Accords built in Ohio. President Bush`s recent trip to Japan yielded an agreement to increase this to 50,000 vehicles. At that rate, every autoworker in America will be guaranteed a job-for less than a week.
In contrast, Germany sold more than 100,000 cars in Japan last year, most of them top-of-the-line Mercedes-Benzes and BMWs.
German automakers can sell cars in Japan because they build what the consumers want, analysts say.
”Mercedes is a status symbol,” said David Nash, an international auto industry analyst for AutoFacts, a consulting firm. Mercedes` image as a top quality car for the wealthy sells as well in Tokyo as it does in Los Angeles. Nash said that American cars don`t have a stylish image in Japan, so trendy buyers don`t want them. And the cars don`t have a reputation for quality, so value-conscious buyers don`t want them, either.
And Detroit has made little effort to find out what the Japanese consumers do want, Nash said, adding that the Big Three haven`t done the necessary market research. If anything, Detroit has ignored the preferences of the Japanese auto buyer and paid no attention to Japanese driving conditions, many analysts agree.
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”We don`t have anything to sell them from their perspective,” said Maryann Keller, managing director of research for the investment firm of Furman Selz Inc.
By contrast, Japanese automakers not only study U.S. consumers to see what they want, but the companies also are increasingly engineering their cars to meet American tastes. The Toyota Camry sold in St. Louis is visibly different from the one sold in Yokohama, for example.
Keller and others offer examples of how the Big Three and Japanese automaker differ, mostly to the detriment of the U.S. manufacturers:
– In Japan, motorists drive on the left side of the road, so vehicles made in Japan have their steering wheels on the right. The Big Three won`t build right-side-drive cars for another two years.
– Japanese automakers redesign their cars as often as every three years because consumers there quickly tire of old models. American automakers sometimes take 10 years to change a model, though they`re trying to speed that up.
– American automakers haven`t spent the time needed to develop a distribution system in Japan. In Japan, some cars are sold door-to-door by salespeople who have served the same family for years. A close personal relationship between an auto salesper son and a customer, common in Japan, is unusual in the U.S.
– No Japanese automaker builds full-size pickup trucks, which are huge moneymakers for U.S. automakers. Keller says the U.S. cannot expect to sell big trucks in Japan, if only because the roads are too narrow.
But even when U.S. carmakers have a product that seems to match Japanese tastes, image problems seem to get in the way. Keller said, for example, that the Japanese will not buy expensive specialty cars built in this country, though that category has a strong niche in Japan.
The Chevrolet Corvette will do almost every high-performance trick performed by a Ferrari, is more comfortable, vastly more reliable and priced at least $70,000 cheaper. But the Japanese don`t want the Corvette.
”If the Japanese Yuppies have the money to buy a two-seat sports car, they are going to buy a Ferrari,” Keller said. ”Their idea of prestige and engineering is not Corvette.”
This does not mean that the U.S. can never expect to sell cars to the Japanese.
Keller noted that it took Japan 20 years to win 30 percent of the U.S. car market. That if American carmakers work at it, they could win a significant portion of the Japanese market in the next century, she said.
”If they gave 10 years of sincere effort, they would certainly have a measurable presence in the Japanese market,” Keller said.
The Big Three can`t be solely blamed for their failure to sell in Japan, of course. Impediments to imports remain in Japan.
Until Bush won concessions last week, Japan required imported cars to be rigorously inspected before they could be sold. Such inspections could take six months.
And Japanese automakers, which have a financial interest in virtually all of the country`s auto dealerships, have until recently refused to offer American cars for sale.
In the past, taxes, tariffs and other hindrances could double the price of an imported car. Ford Motor Co. executives say that a $15,000 Mustang sells for $30,000 in Japan.
But despite the obstacles, some foreign cars sell in Japan.
The United Kingdom exports Rover Minis. The Mini, designed in the early 1950s, is best described as ”cute.”
The Mini looks small enough to park on a dinner plate. This is a selling point in a country where a parking spot rents for thousands of dollars a year. And the car`s retro appearance appeals to young buyers in Japan, where cars from the 1950s and 1960s are considered chic.
David Garrity, an auto analyst with Nomura Research Institute, said American carmakers could succeed in Japan if they show a little creativity. Nomura Research is a subsidiary of Nomura Securities Ltd., the largest investment house in Japan.
Garrity said a U.S. automaker ought to buy a small Japanese automaker to get access to its dealerships. That would end the distribution bottleneck.
”Buy Isuzu,” he said. ”Isuzu is losing buckets of money.”
Garrity also suggested that General Motors, Ford or Chrysler could link up with a toy company to sell cars.
Toys ”R” Us Inc. is seeing remarkable success with stores it is opening in Japan, where American-style retailing is unknown. Toys ”R” Us plans to build its stores adjacent to American fast-food restaurants, which also are extremely popular.
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”Go into a cooperative arrangement with Toys `R` Us,” Garrity said.
”What better opportunity to get the family to look at something like the Chrysler mini-van or the Cadillac Seville STS or the Taurus wagon?”
Garrity said that if the automakers carefully pick their offerings, they may find the Japanese receptive.
He believes the Seville could compete with Lexus. In addition to the Taurus wagon and Chrysler mini-van, he thinks the Dodge Stealth might find a niche.