Why Are American Cars Not Successful In Japan

Japanese car brands such as Toyota, Nissan, and Honda are known to dominate the US market while the home grown brand fail to achieve similar standards.

And on the converse, very few American made brand cars can be seen on Japanese roads despite it being the third-largest car market in the world.

Both US President Donald Trump and the American Automotive Policy Council (AAPC) has called that situation unfair. The AAPC is a body that represents that three big U.S. auto manufacturers – General Motors, Ford and Fiat Chrysler.

According to industry observers, there are a number of factors that have prevented American cars from being successful in Japan. Cars made by American brands are not suited for Japanese consumer tastes and US auto companies have not made much investment t5o set up dealership networks in Japan. Additionally, a section of Japanese consumers still believe in the notion that US cars are unreliable and inefficient.

Kei cars, a special class of extra small cars, accounts for almost 40 per cent of all the cars sold in Japan. and almost all of them belong to Japanese brands including the likes of Suzuki and Daihatsu. Small cars have been successful in Japan because of their easy manoeuvrability on narrow streets and being able to fit into tight small parking spaces since Japan as a country is densely populated one.

“In Japan, there is a different market and different consumer,” said Kristin Dziczek, vice president of industry, labor & economics at the Center for Automotive Research. Even though there is no import duties levied on US vehicles exported into Japan, American cars are not designed to suit the special needs of the Japanese consumers. “We are giving them our off-cast, things we make for the North American consumer that we hope we can then sell in other markets.”

About 95 percent of the cars on Japanese roads are Japanese makes which shows the degree of expertise of Japanese car makers to serve their home market. The rest are imported but most are European luxury vehicles or sports cars.

Richter said that American carmakers “don’t really try”. While GM sold only about 700 cars in Japan in 2018, Ford exited the market completely in 2017.

He said that the US car brands find it hard to get a toe hold in Japan because they have not managed to differentiate themselves from the com[parable cars that are offered in the market by Japanese brands.

That is probably the factor that has seen Fiat Chrysler’s Jeep brand gaining a degree of popularity in Japan. Wranglers, which is the model perhaps most emblematic of the brand and the rugged, outdoor American lifestyle it symbolizes, is the one that is seen on Japanese roads when it comes to Jeeps.

Rebecca Lindland, an independent auto analyst, said that the Jeep brand has a strikingly strong image abroad.

“If you think about some of the most powerful, well respected, and well-liked brands in that world, I would say Jeep is a dark horse in that race,” she said.

(Adapted from CNBC.com)


Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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