And You Thought Japan Couldn't Learn From DetroitKaren Lowry Miller
Masako Hyodo, a 35-year-old research assistant in Tokyo, got a pleasant surprise when she went shopping to replace her three-year-old Integra: The economic slowdown is giving Japanese car buyers a lot more room to wheel and deal. A Toyota Motor Corp. dealer offered to knock 30% off a Celica sticker, and showrooms stayed open late to suit her schedule. In the end, she snagged a silver Honda Prelude for $16,600, after a trade-in and a $1,250 discount.
Tough times have Japan's carmakers and dealers looking for new ways to snare buyers. After several years of 8% growth, auto sales in Japan slid 3.9% in 1991 and are off 5.7% so far this year. Operating profit margins at Japan's 2,000 dealers average a mere 0.6%, compared with 1.5% in the U.S. A third of them are losing money.
The squeeze is prompting creative marketing. Dealers are lining up parking places--a scarce commodity that buyers must have before they can legally get a car. They are jazzing up showrooms with Halloween parties and other events. Toyota Tokyo Corolla Co. has a new showroom that's predominantly lavender and staffed by women. "We are less intimidating to customers," says manager Toshiko Suzuki.
To help draw bigger crowds, dealers are breaking a major taboo by joining forces with rivals to create U.S.-style auto parks with competing models under one roof. Three are in operation now, and more are likely. "We study the American case because sooner or later, it ends up in Japan," says Kazumasa Goto, executive vice-president for Japan Automobile Dealers Assn. (JADA).
FEAR OF FINANCING. So far, consumer rebates are unheard of in Japan. There is some low-cost dealer financing available, but it hasn't grabbed Japanese consumers. Typically, they pay cash, using either their biannual bonuses or bank borrowings. Now, JADA is encouraging dealers to promote financing in the hope that it will become a new profit center.
Auto makers have launched a spate of specials, too. For an October sale, Mazda Motor Corp. rolled out just 300 of a two-seat, black-only version of its RX-7--and sold them all. Honda Motor Co. is selling Integras with an option package that includes air conditioning, a cassette player, and other goodies for just $190. Priced separately, those options would add up to $2,100.
To be different, one Nissan Motor Co. outlet throws a monthly party, inviting anyone with a birthday that month in for cake. "We do whatever it takes to get them to know us," says sales manager Shoji Senba. In this business climate, a gimmick may go a long way.