TOKYO Jan 13 American "muscle car" enthusiast
Satoshi Kimiwada says his business selling used Chevrolet
Camaros, Ford Mustangs other U.S. cars in Yokohama is on the
verge of extinction.
But he does not blame the "non-trade barriers" that U.S.
automakers say block their access to Japan's car market, or the
trade negotiators in Washington and Tokyo whose talks to resolve
them have been bogged down in months of wrangling.
Instead points to the brash image of the U.S. brands he has
been selling in Japan for 20 years, which clashes awkwardly with
mainstream consumer tastes in the world's no.3 car market.
"People gawk at American cars when they drive by here, where
green cars are the norm," said Kimiwada, 39, whose small garage
is decorated with old Californian number plates and neon signs
from U.S. drive-ins. "They're gaudy. The styling sticks out."
"Made in America", he says, in Japan means loud,
gas-guzzlers whose big engines attract a high ownership tax
Whilst complaining about currency manipulation and
non-tariff measures that they say make Japan the world's most
closed car market, Detroit's Big Three seem to have long settled
for a narrow, shrinking niche even as European manufacturers
stake out a growing presence.
With off-road Jeeps outselling mass-market Chrysler cars in
Japan, U.S. makes have been stuck at a dismal 0.2 to 0.4 percent
share for a decade, less than a quarter of their mid-1990s peak,
when they still attempted to compete for the mass market.
German rival Volkswagen AG, by contrast, has
kept a steady presence in the mass market with a share of 1.2
percent. German brands also including Mercedes-Benz,
BMW and Audi hold around a 4 percent share overall.
Japan's automakers dominate their home market with more than
a 90 percent share, and have also captured more than a third of
the U.S. market. American car makers say the playing field is
tilted against them.
On the sidelines of drawn-out negotiations over the
Trans-Pacific Partnership regional free trade agreement, U.S.
and Japanese officials are discussing a number of barriers in
Japan such as noise tests and rules on certifying radio
The Big Three are arguing for a slow-paced 25-year phase-out
of the 2.5 percent U.S. tariff on Japanese cars and 25 percent
on trucks, with an option to re-impose them should Japan violate
NICHE WITHIN A NICHE
The Big Three insist they have not given up on Japan as they
chase fast-growing markets elsewhere in Asia, but on the ground
their strategies suggest they are still playing to the
decades-old image of American cars.
Kimiwada's sales plummeted from 70 cars a month worth about
$240,000 in the mid-1990s to just two or three today, putting
the future of his business in doubt.
U.S. carmakers' Japan sales peaked around 1996, when the yen
was strong and they offered more than twice as many brands as
today, while operating nearly four times as many dealerships and
investing in TV advertising.
Since then, Japan has entered a protracted economic slump
and the Big Three were engulfed in financial crises and even
bankruptcies at home.
General Motors Co, Ford Motor Co and Chrysler,
all making their presence felt at the North American
International Auto Show in Detroit this week, skipped November's
biennial Tokyo Motor Show for the third time in a row.
"It was a matter of how to best allocate our marketing and
advertising costs when considering that import cars are a niche
segment to begin with, and even within that we are a niche
player," said GM Japan Managing Director Sumito Ishii.
In the five years to July 2013, the Big Three each spent
roughly a tenth to a twentieth of Volkswagen's promotional
costs, according to Japan Automobile Manufacturers Association.
GM Japan, whose official dealership network dropped the Opel
and several other brands in the last decade and now only sells
Chevrolets and Cadillacs, sees the latter, luxury brand as its
best chance to grow, said Gregg Sedewitz, GM Japan sales and
Chrysler, which sells Jeep- and Chrysler-badged cars but no
longer the Dodge, is focused on promoting the former's off-road
image, said Shinji Kuroiwa, spokesman for Fiat Chrysler Japan.
The exception is Ford, which had ditched compacts and sedans
in Japan in 2007 to focus on big vehicles such as the Mustang
and SUVs. It retreated further in 2008, when it sold a
controlling minority stake in No. 5 Japanese automaker Mazda
Motor Corp as it rebuilt its finances.
But last year it brought back the Focus and in February it
will reintroduce the compact Fiesta for the first time in seven
"We had to stop selling them then because of the business
situation at our headquarters, but now we are able to offer very
attractive cars that match Japanese customers because we have
global products," said Hiroshi Kinoshita, Ford Japan's Marketing
Still, only around 4,200 Fords were registered in Japan last
year, less than a fifth of its peak in 1996.
That contrasts with Volkswagen, whose Golf in November
became the first import to be named Japan's car of the year,
beating Honda Motor Co's Fit subcompact and Toyota
Motor Corp's Crown luxury sedan.
Volkswagen's total Japan sales of around 67,300 vehicles
last year, while still a fraction of the 3 million it sells in
China, were nearly five times the combined figure of Detroit's
Volkswagen aims to boost Japan sales to 100,000 vehicles
over five years, said Yasuo Maruta, Volkswagen Group Japan's
communications director, by expanding its dealership network.
"If the non-tariff barriers are gone, that would certainly
lessen the burden," said Ford's Kinoshita. "But that won't mean
our cars are going to automatically take off."