What's This? American Cars Gaining In Japan?Karen Lowry Miller
When Hideo Oka got his driver's license at age 20, a big American car was an impossible dream. So he settled for an Isuzu. Finally, in 1985, he bought a used Cadillac. And this year, he splurged on a new Fleetwood--$60,000 in Japan. The Tokyo dentist, now 55, proudly maneuvers his Caddie to work and to tennis or mountain-bike trails on weekends. "I worked hard all my life to earn this," he says.
What's that? Detroit iron a status symbol in Japan? Don't be so shocked. U. S. cars are still rare there, but appeal to a growing coterie of loyal customers. And those so bold as to own Ame-shas, as they're known, often love `em. "It's easier to drive," says Haruo Morioka, 61, a Mercedes fan until her husband gave her a 1990 Chrysler New Yorker. "I was surprised."
From a tiny base, Detroit is making progress in Japan. The Big Three's sales have climbed 800% since 1985 and this year could top 1979's record 16,709 units--even as Japanese imports of foreign-made cars are running 13% behind a year ago. The gains are relative: Total imports to Japan were 221,706 cars last year, including 128,832 from BMW, Daimler Benz, and Volkswagen-Audi. And those numbers are dwarfed by the 3.3 million cars and trucks the Japanese sold in the U. S. Still, General Motors and Chrysler are recovering--and Ford is trying to--from a dizzying decline in Japan in the early 1980s. Back then, poor gas mileage and quality demolished Japanese sales of U. S. cars. Even Tokyo gangsters traded in their cream-colored Lincolns for Mercedes.
The Big Three haven't yet dealt with all the problems that led to this debacle. Rather than setting up dealerships, as the Germans have, they still rely heavily on importers to sell their cars. Moreover, they simply ship over U. S. models "as is"--with steering on the left instead of on the right, Japanese-style. That limits sales mainly to those who consider left-side drive chic. By contrast, Honda Motor Co. expects to ship 12,000 U. S.-made cars to Japan this year, more than any of the Big Three. One reason is that 67% of its exports have right-side drive. "The Americans haven't tried as hard," argues Norihiro Kono, deputy director for autos at the Ministry of International Trade & Industry.
Until recently, for instance, Detroit barely pushed its niftiest models. In Japan, "jeep" is a generic term for four-wheel-drive vehicles, because Chrysler Corp. hasn't hyped the Jeep trademark. It's just starting to sell Jeeps through Honda, and a right-side-drive model isn't expected until 1992. GM hopes its snappy Saturn will charm Japanese drivers, but that car probably won't reach Tokyo docks until 1993. Ford's Explorer is a hot seller in the U. S., but exports to Japan started only in October--through seven small Japanese companies. Sales so far: 145.
PERSONAL STATEMENT. Still, many of the factors that hurt Detroit are being addressed. Duties on imports ended in 1978. Washington is pushing Tokyo to deal with informal barriers such as a distribution system that keeps most dealers loyal to one manufacturer, who often provides such perks as loans, showroom remodeling, and training. Moreover, U. S. producers have raised the quality and mileage of their cars nearly to Japanese levels. And U. S. models are often safer than Japan's domestic ones. James Steinhagen, General Motors Japan Ltd.'s vice-president for marketing, sales, and service, argues that Japanese consumers don't know yet how much U. S. cars have improved.
Indeed, Japanese who try U. S. cars like their styling and zip. Last year, Fumio Maruyama, 42, bought a Jeep Cherokee. The film lighting technician found a hole in the muffler, and sometimes the engine goes kacha-kacha. But for a car so powerful yet compact, "it's worth it," he says. Magazine editor Kumiko Kato says many Japanese consider American wheels "a way to express ourselves."
Not that playing to Japanese consumers is a snap. To clinch a sale, BMW will paint a car to match a customer's favorite dress. Salespeople try to lock buyers in for life, contacting them often and on birthdays and at New Year's. Tokyo florist Sachiko Yamada, 40, is on her fifth Nissan. She likes Corvettes, but she inherited her Nissan salesman from her father and feels "too obligated to switch."
TIGHT TIES. The Germans are stepping up the pace to deal with all this. Since 1981, BMW has poured $100 million into a network of 122 exclusive dealers who sold 36,527 cars last year. Mercedes and Volkswagen are also setting up their own dealerships, while spending about $200 million each on new centers that go over imports to make sure they're shipshape for Japan's demanding equipment standards and buyers. Mercedes has also signed up Mitsubishi to sell some models, while VW expects to sell some of its cars through Toyota.
Detroit, by comparison, is taking baby steps. GM hopes to boost its exports to Japan by 17% this year, to 10,000. It has just upgraded its Tokyo office to a subsidiary and is pushing some models with its own ads. But it plans to keep selling though its distributor, Yanase & Co. Chrysler has tripled its dealer network since creating a Japanese sales organization three years ago that is 85% owned by trading house J. Osawa & Co. But it still has just 45 outlets.
Ford has done the most to build its brand. Mazda Motor Corp., in which Ford holds a 25% stake, sold some 82,000 of its cars with Ford nameplates last year. Ford also has bought 34% of Mazda's Autorama, a 334-outlet chain that mostly sells Mazda-built Fords. But U. S.-made Fords aren't doing well. Sales of the Probe, made in Michigan with Mazda, fell 41.3%, to 1,588, in the first six months of 1991--largely, Ford concedes, because the car looks dated. A redesigned model is due next summer. Meanwhile, Ford hopes that a former Toyota executive it just named president can give its subsidiary a boost.
The Big Three can't afford to be laggards much longer. The newest developments in autos now often appear in Japan first. So to defend its home turf, Detroit has to compete over there. And that means going after more than a few maverick dentists.