Arab Today, arab today foreign brands still minnows in japanese car market
Last Updated : GMT 16:23:15
Arab Today, arab today
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Foreign brands still minnows in Japanese car market

Arab Today, arab today

Arab Today, arab today Foreign brands still minnows in Japanese car market

Tokyo - AFP

Spotting a foreign car on Japanese streets is a rare sight -- save for the odd luxury brand like Ferrari or Jaguar -- a point underscored at the Tokyo Motor Show this week. It was the third time major US automakers including General Motors and Ford have skipped the show, which is held every two years and which kicked off Wednesday. Critics say their puny presence gives them little incentive to spend time and money trying to crack the world's third-largest car market. While Japanese brands such as Toyota and Nissan enjoy huge success in China and the US, the world's top two car markets, overseas names that also include Renault, Peugeot-Citroen and their South Korean rivals accounted for just 4.5 percent of the 5.37 million vehicles sold in Japan last year. Some critics pin the imbalance on non-tariff barriers they say effectively shut foreign automakers out of the market -- a key issue in ongoing free-trade talks. Others counter that most overseas brands offer few models and have failed to come up with cars that Japanese drivers want to buy. Among the exceptions are Mercedes-Benz, BMW, Volkswagen and Volvo but even their sales are a small fraction of the market. Light vehicles known as "kei" cars which have small engines of 660 cc or less account for about one-third of sales in Japan, a category almost non-existent among US and European manufacturers. Frederic Bourene, head of Japanese marketing for France's Renault, chalked up the challenge to the dominance of Japan's domestic manufacturers with their well-established supply chains and thousands of dealerships. "The Japanese market is highly competitive," Bourene told AFP on the sidelines of the motor show. "There are eight domestic manufacturers that already have plants here and don't need to import with the logistical issues and time that goes with that." Renault, which owns more than 40 percent of Nissan, has doubled its sales in Japan over the past four years, but it still expects to sell just 3,600 vehicles in 2013. "Between the logistics costs and the exchange rate, foreign brands are about 20 percent more expensive than Japanese cars in the same range," Bourene added. Still, foreign automakers have long complained that Japanese authorities erect huge barriers to entry into the lucrative market. Those walls include requiring firms to change the headlights on Japan-bound cars or install extra and costly electronics, they say. "We often have to add equipment to get approval for our models," said Tomohiko Yoshioka, an executive at Peugeot-Citroen's Japanese unit. That is a key hurdle in trade talks between the European Union and Japan as well as separate negotiations involving Tokyo and Washington, which is leading the charge for the mooted Trans-Pacific Partnership (TPP). The proposed trade pact's dozen members account for about 40 percent of the world's economy. General Motors, which last year was overtaken by Toyota as the world's biggest automaker, has just 34 dealerships in Japan for its Cadillac and Chevrolet brands -- and sold only around 1,000 cars there last year -- against 4,700 locations for its Japanese rival. "Anything that can help bridge the gap between Japanese and international regulations would be welcome, including through the TPP," said George Hansen, a spokesman for GM's Japan unit. Ford boss Alan Mulally has been more blunt, accusing Tokyo of manipulating the yen's sharp decline over the past year to gain another trade advantage. The United Auto Workers union has called Japan "the most closed automotive market in the world", while the European Automobile Manufacturers' Association said earlier this year that it backed free-trade agreements (FTA) which are "balanced and provide real opportunities for export". "We still have some reservations about an FTA with Japan," it said. German carmakers and Sweden's Volvo have done better in Japan, accounting for about three-quarters of the foreign cars sold in the country. Volkswagen, the world's third-biggest producer whose brands fall squarely in the economy to mid-range, expects to sell 60,000 vehicles in Japan this year. "Japanese consumers do not like taking risks and they want to feel confident in the brand they're buying," the company said. "We're working on our image with well-known Japanese celebrities to improve our connection with consumers." Satoshi Hoshikawa, a spokesman for BMW, said the firm sold 40,000 cars in Japan last year because "we constantly change our models to meet customer needs" with a range of models including diesel and hybrid offerings -- a nod to the country's drivers who tend to expect fuel-efficient wheels. But Volkswagen's presence in the key market comes at a big cost, said one competitor. "They sell at a loss."

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Arab Today, arab today foreign brands still minnows in japanese car market Arab Today, arab today foreign brands still minnows in japanese car market

 



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