June 22 (Bloomberg) -- Last December, Japan was aghast when a Lamborghini and eight Ferraris out for a Sunday drive piled up in rural Yamaguchi prefecture, an event global media called the world’s most expensive car accident.
While the cost of the crash may have shocked -- it involved 13 vehicles with an estimated value of almost $4 million, according to Sports Nippon -- it was equally surprising that it happened 800 kilometers from Tokyo and that the Ferraris were all registered in Kyushu, Japan’s southern main island.
Even after two decades of economic stagnation, Japan remains a lucrative market for the Italian carmaker and its rivals. So lucrative, in fact, that these companies are increasingly looking beyond the capital to tap Japan’s 400 trillion yen ($5 trillion) in personal savings.
“When the economy gets worse, people tend to spend on things that can bring them extraordinary experiences,” said Toshihiro Nagahama, chief economist at Dai-ichi Life Insurance Research Institute Inc. “In this situation we can see a rise in sales of hyper-expensive items, even while people cut spending on daily necessities.”
McLaren Automotive Ltd., known for its Formula 1 racing success, chose Osaka’s tree-lined main boulevard to open the first Asia dealership for its MP4-12C, a sports car that kicks out 592 horsepower and costs about $350,000. Two blocks away, Ferrari SpA leased space to display new models such as the $300,000 California HS convertible. Some 300 km farther west, in Hiroshima, Ferrari last winter opened its biggest showroom in Asia.
The Kansai region around Osaka has particular potential for McLaren, said Takanori Mizuno, sales manager of Hakko Automotive Industries Co., a local partner. Hakko in March opened the showroom, which features a single MP4-12C in orange and a vintage McLaren F1 racer emblazoned with the name of the late Brazilian driver Ayrton Senna. It has already sold 30 cars, and new customers must wait more than nine months for one of the coupes, Mizuno said.
“Some of our customers paid in cash, and they thought the price was so cheap,” said Mizuno. “Others didn’t even need to see the car before purchasing.”
The British automaker opened a second Japan dealership this week in Tokyo’s Akasaka district and expects to deliver a total of 60 cars in the country in 2012. It aims to have eight locations in China by 2014, and also opened showrooms this year in Hong Kong and Singapore.
Eight of Japan’s 23 billionaires reside outside of Tokyo, according to data compiled by Bloomberg, and the country’s richest man, Tadashi Yanai, bases his Fast Retailing Co. apparel chain in the southwestern prefecture of Yamaguchi. The number of Japanese with at least $1 million in financial assets grew 4.8 percent to 1.82 million in 2011 from a year earlier, affirming Japan’s position as the country with the world’s second-largest population of high-net-worth individuals, after the U.S. The number represents 54 percent of Asia Pacific’s total, according to a report by Capgemini SA and RBC Wealth Management.
In its quest for wealthy car buffs, Ferrari has gone to Hiroshima, an industrial city of 1.2 million that’s home to Mazda Motor Corp. The showroom it opened in February has 1,173 square meters of space on two floors that includes a three-dimensional “configurator” that allows potential buyers to visualize what their customized car might look like.
While Tokyo remains the key market, Hiroshima is showing “very good signs of growth,” Maki Kataoka, a spokeswoman for Ferrari, wrote in an e-mail.
Asia is important for Ferrari’s parent, Fiat SpA, which is struggling in Europe. Fiat has postponed the introduction of new models in Europe, and the company is cutting investment in the region by 500 million euros ($632 million) on expectation that the auto market there won’t recover in the second half, Chief Executive Officer Sergio Marchionne said last week.
A recovery in Europe “depends on many factors: first Greece, then the way in which the Euro currency will continue and what Europe will do to sustain growth,” Marchionne said in an interview.
Ferrari says it has sold about 12,000 cars in Japan since it entered the market 36 years ago, and the country is home to the largest owners’ club worldwide, with 640 members.
Motoaki Ishikawa, a 45-year-old entrepreneur who runs a chain of nursing homes in the Kobe area, said he settled on Ferrari after driving other sports cars such as Lamborghinis because of the company’s close relationship with its customers.
“The fun of Ferrari is you feel you belong to a community of Ferrari lovers,” Ishikawa said at an event to mark the opening of the carmaker’s showroom in Osaka. “It’s purely about the fun of driving on the open road. When I’m in town, I’ve got a driver who takes me around in my Audi.”
Ferrari’s business can continue to grow in Japan, even as the economy has contracted 11 percent since the late 1990s, said Herbert Appleroth, the Italian company’s Asia Pacific chief executive officer. Last year, when Japan was devastated by the earthquake, tsunami and subsequent nuclear crisis, orders rose 20 percent and the company delivered its entire inventory of 386 cars.
While Ferrari’s Japan sales had declined by 10 percent the year before, according to the website of the Japan Automobile Importers Association, and China in 2011 overtook Japan as Ferrari’s No. 1 Asian market, Appleroth is optimistic about the country’s potential.
“We are happy,” he said, “if we can see at least 10 percent growth for the years to come.”
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