Why Ford And Other American Cars Don’t Sell In Japan

Why Ford And Other American Cars Don’t Sell In Japan

October 23, 2019 100 By Stanley Isaacs


When it comes to cars, Americans
seem to love the Japanese. But the Japanese don’t seem
to love Americans back. Japanese brands sell remarkably well
in the United States. Several of the best-selling automakers in
America are from Japan, and their products seem to dominate entire
segments in sales and critical acclaim. Japanese automakers sell so
many cars in the U.S. that they actually employ vast numbers
of American workers in factories around the country. Japanese automakers actually build a third of
all the vehicles made in the U.S. But the Japanese don’t seem
to be interested in America’s SUVs, pickup trucks, muscle cars or just
about any vehicle made by Detroit. Ford left Japan entirely in 2017. General Motors keeps a presence there, but
it is tiny — the largest U.S. automaker sold only 700 cars
in Japan in 2018. And people are divided as to why
and what, if anything, should be done about it. President Donald Trump has criticized the
imbalance, but so have U.S. automotive trade associations, who
blame Japanese protectionism. While there are no
Japanese tariffs on U.S. imports, a number of critics say there
are all kinds of technical barriers that make it harder for U.S. companies to sell in Japan. Here in the United States, when we
set regulations for fuel economy or safety or communications standards or whatever,
all of the automakers that sell and produce in the United
States are party to that conversation. In Japan, it’s a much more
closed process for regulatory compliance. It’s “these are the rules and
you will meet the rules.” Japanese producers have input into that
and suppliers, but it’s pretty closed to any external companies that
would be doing business there. But some industry experts say
that really isn’t the problem. Instead, the reasons U.S. cars are so rare in Japan, which
is the world’s third-largest car market, have more to do with Japanese
consumer tastes, the abiding if outdated stereotypes the Japanese have about the
quality of American cars, and the very different way customers shop
for vehicles in Japan. It is first important to note
that Japanese brands all but completely dominate local roads. More than 95 percent of all cars
sold in the country are Japanese. Imports make up the balance and
most of those are higher-end European luxury vehicles and sports cars. This is partly because the
Japanese have pretty specific needs. For one thing, space
is incredibly tight. Wildly popular in Japan are these
so-called Kei cars, which are tiny vehicles preferred by drivers who have
to thread their way through narrow streets and crowded cities. Kei Cars alone make up
40 percent of the Japanese market and U.S. automakers don’t make them. Americans, on the other hand, tend
to excel in making big vehicles, particularly pickup trucks and
large sport utilities. In recent years, American automakers have
scaled back or even entirely killed off their own lines of
compact vehicles, which are often still bigger than their
Japanese counterparts. In fact, many of the Japanese vehicles
sold in America — from sedans such as the Toyota Camry all the way up
to the pickups — are not even particularly popular in Japan. All three Detroit automakers have less
than 1 percent market share. One of the bestsellers, Jeep, sells about
10,000 vehicles in Japan a year. The Japanese car buying experience would
also likely shock many Americans, who often view a trip to the
dealership as one of life’s necessary evils. Much of Japanese business culture is
built around service and hospitality, and auto dealerships
are no exception. Japanese dealerships offer customers nearly
white glove service, and the way buyers choose cars is entirely
different from the traditional buying experience in the U.S. Whereas American shoppers will often choose
a car from what is available on a dealer lot, Japanese buyers can
often custom-build a car out of a catalog and then have it made for
them in a matter of weeks. A strong local supply chain and
local factories allow Japanese automakers to do this. Furthermore, quality of service
is often quite high. Dealerships frequently have amenities such
as cafes and complimentary car washes. They will also follow up
with customers sometimes even years after a purchase. Foreign automakers overall have had difficulty
adapting to this way of selling. Moreover, the Japanese have
longstanding perceptions of American cars as inefficient and unreliable. This somewhat outdated view originates in
the decades from the 1960s through the 1980s, when Japanese
brands were ascending and American automakers were plagued with criticism and
scandal over vehicles such as the Chevrolet Vega, the AMC Gremlin,
the Ford Pinto and the Chevrolet Corvair. And though American manufacturers have
made far more fuel-efficient engines in recent years, the U.S. has historically made some gas guzzlers
when compared with cars made elsewhere. Yeah, I think there is
a hangover for American vehicles. You know, what does an American
car say about you in Japan. That baggage is carried with that. Meanwhile, the Japanese rose to power in
the auto industry in large part on their reputation for building solid, efficient
cars that don’t break down. Of course, many observers note that American
autos have done a lot to close the reliability gap over the years,
and cars overall are able to log far more miles on the road than
they did even a decade ago. And U.S. automakers are adamant that they would be
better able to compete in Japan if the country removes barriers
that make doing business difficult. The trouble for Detroit is that Japan
is just one of the international markets where U.S. automakers have struggled. All three Detroit automakers have had
challenges in South America and Europe. While China which is the world’s
largest car market could become a tougher place to do business
with slowing economic growth, increased competition, and trade disputes. If something doesn’t change, U.S. automakers could become just that: American
companies that sell trucks and SUVs to Americans.