The Japanese automotive market may be notorious for its relentless unfriendliness to automobiles from non-domestic brands. General Motors knows this all too well, as The General sold a mere 2,660 vehicles (between Cadillac and Chevrolet) in 2011 while cross-town rival Ford managed to move 3,469 vehicles during the same time. Meanwhile, Volkswagen — which has made it a goal to become the world’s biggest volume automaker by 2018 — sold 50,635 vehicles in The Land of the Rising Sun, and is strategizing to sell 110,000 units in the country in a matter of a few years. If the objective becomes a reality, the German automaker will be the first non-Japanese auto brand to crack the 100,000-unit per year mark in the country. The situation is glum for GM, and illustrates just how much the automaker needs to step up its efforts in Japan… unless it intends to allow VW to eat its lunch in all markets outside of North America.
For its part, Volkswagen is entering new segments by introducing new products in the Japanese market — including the CC four-door coupe and Up! city car. VW also plans to bring its diesel offerings to the country and to expand its dealer network from 246 today to 337 by 2018. By comparison, GM has 33 sales outlets in Japan — a number that isn’t expected to change much in the near future, according to a GM Japan PR representative. VW’s new model introductions will bring VW the automaker’s individual nameplate count in Japan to ten (with nearly 15 body style variants of each), not including 12 nameplates (18 body style variants) offered by Audi. Meanwhile, Chevrolet and Cadillac only offer four nameplates each.
Current Chevrolet Offerings In Japan
- Sonic
- Captiva
- Camaro
- Corvette
Current Volkswagen Offerings in Japan
- Up!
- Polo
- Bettle
- Golf hatchback and variants, including cabrio, wagon, and Touran MPV
- Scirocco
- Tiguan
- Sharan
- Passat sedan and variants, including wagon and AllTrack
- CC
- Touareg
Current Cadillac Offerings In Japan
- ATS
- CTS range
- SRX
- Escalade
Current Audi Offerings In Japan
- A1 range (3/5 door)
- A3/S3
- A4 sedan & wagon/S4 sedan & wagon/A4 AllRoad Quattro
- A5, A5 Cabrio, A5 Sportback/S5, S5 Cabrio, S5 Sportback/RS5
- A6 sedan & wagon/S6 sedan & wagon
- A7/S7
- A8/S8
- Q3
- Q5
- Q7
- TT coupe & roadster/TTS coupe, TT RS coupe
- R8 & R8 Spyder
In effect, Volkswagen (along with Audi) are embarking on an aggressive expansion strategy in Japan and are offering 24 nameplates (and nearly 50 model variants), while General Motors is offering a measly eight nameplates and 12 body variants between Chevy and Caddy.
And while it has been difficult for non-Japanese manufacturers to break into the Japanese automotive market, barriers are receding. Recently, the Japanese government opened the latest round of eco-related subsidies to foreign brands; a few European brands qualified, but no American brands did. The move helped increase sales of non-domestic-branded passenger vehicles 22 percent to 150,711 units through August of 2012.
As it stands, GM just doesn’t seem to be aggressive enough when it comes to competing with its (arguably) biggest rival in Japan. Perhaps it has its hands full with growing its South American operations, fixing loss-making European business, and implementing an aggressive Chevy model launch for 2013. But that should still not detract from growing its presence in other global markets, like Japan. But hey, at least GM is big with bikes there…
Comments
Japan is very dependent upon exports, they have very little natural resources and protecting not only their automarket but automakers has always been apart of it’s governments history, dating well back before World War II.
This is similar to China requiring manufacturers to have a in-country partner.
Japan is bullying the automotive industry with importation restrictions and taxations.
I know all of Ford, GM, and ChryCo have, or have had, joint ventures in Japan, not sure if those still exist.
From what I can gather, Japan no longer charges tariffs on imported cars (at one point was 40%), but they have been notorious with devaluating the Yen (even if it is sitting high already right now) which causes unfair trade prices for imported goods compared to domestic, giving their exports price advantage over everyone else. Japan has been in an economic slump since the 90’s and not regulating the amount of vehicles it imports won’t help them.
Japan exports 11+million vehicles yet only buys half that (again with them being heavily dependent on export).
During WWII, obviously Ford-GM-ChryCo suspended all operation in and to Japan (suspended/booted out). Afterwards importation was limited and licensed. The Japanese government sought for the creation of a major world class automotive industry as its number one National Industrial Policy strategy and provided every benefit, incentive and protection from competition that it could.
During the 70’s Japan lowered restrictions of both tariffs and investments in joint venture operations, but their industry was already too strong to make a dent.
Im not sure if this is still in place, but Japan would not allow foreign cars to be built in country, and all imported cars underwent a 2 days inspection period that was utterly ridiculous. And were still providing tax favourtism to it’s domestic brands.
I remember (even as 9 or 10 year old) when Clinton threatened Japan by imposing a high tariff if Japan didn’t agree to open markets from the US.
And even more recently, the “cash for clunkers” program, the Japanese version, would only allow their own domestic brand to gain. Where as the US program was open to all.
They have emplaced protectionist regulations which go against G7 agreements.
Should the American brands give up in Japan? No. But they need a new strategy, one that doesn’t rely solely on them fighting for it. The Japanese government has long provided assistance to it’s brands yet very rarely does North America hear of this. It’s going to take the big 3 to get serious about Japan and have a plan before government support can be asked for.
It’s pretty simple, American brand cars have a horrific quality reputation that is well deserved, unfortunately. It will take 10-20 years to bring it back- it took Toyota 20 years to build their reputation here. The Germans, with their good quality reputation, are selling lots of cars there (former axis partner with Japan- hmm).
“The Germans, with their good quality reputation…” Have you ever driven (and had to service) a VW?
As an aside, VW provides 3 years of free maintenance with every new model purchased.
For the most part the German’s are known for their meticulous engineering prowess, but that’s on higher end, expensive, vehicles.
VW is the only brand sold in North America I hate, and would never buy. I won’t recommend anything they sell. The do have vehicles that intrigue me, like the R32. To me, their vehicles arent worth a damn and a little as this may seem, they have the absolute worst car culture following them. There are obviously people who get 40+mpg from their oil burner das auto and it’s at 300k miles, and that’s great, but far too often do people get hosed by dealers in repairs on a car comparable to a Chevrolet.
For car’s under $30k (which is what I’m helping my sister-in-law buy), the top contenders are:
Kia Optima*
Hyundai Elantra with options
Chev Cruze with options
Buick Verano* – i think she should buy this
Buick Regal
Ford Taurus
Ford Fusion
Mazda CX-5
Chev Equinox
Hyundai Santa Fe
It’s funny, 5 years ago I would have never said anything about South Korea, now I think the Optima is the best overall midsize car in terms of engine/drivetrain, interior, exterior, options, warranty, mpg. The Cruze is fine, but getting old, and I’d rather see her get a near base Verano over an optioned Cruze.
For compact= Verano
For Midsize= Optima
or Optima Hybrid is what I’d be getting if I were her.
agreed 100%. and while we are on it Audi isn’t much better either! although i LOVE me some Advants and the current S5.
i’d agree with you except if you have lived in Japan (like i have) you’d know that many of the “non export” offerings that are dumped on the home market are nothing to write home about quality wise either.
second is the fact that ANYTHING American is well received in Japan especially the cars – many of the cars they are so enamored with are actually some of the worse as far as American cars go (like IROC Camaros, and late 70s malaise era iron)
the real reason GM isn’t making much headway is because GM is trying to capitalize of its “Americaness” which by default makes it a “”boutique player, chasing after the rich and eccentric instead of the mainstream. i don’t blame them though. what does GM, Ford, or Chrysler have to offer that the Japanese domestic market doesn’t have in spades, even compared to Europe? NOTHING except big flashy V8 Americana.
if it’s small efficient, stylish, or what passes for a car anywhere outside of the US; the Japanese cornered that market and crushed all competitors years ago. i’m surprised and impressed that Volkswagen sold as many cars as they did. that in and of itself is very curious. anyone who has dealt with a modern VW (of even an old air-coolded one) knows that VWs are not shining examples of reliability and trouble free operation.
in the long run it kinda doesn’t matter anyway, because Japan is already a saturated and declining market for cars anyway. many of the young are in debt up to their eyeballs, as well as under or unemployed. and to be frank, Japans transportation situation is such that there is really no need for a car anyway. even in relatively rural regions like where i lived (Hachinohe prefecture).
it’s painfully apparent that cars are a pure luxury item in Japan. the cost of owning even an economy car is astronomical compared to the US, never mind Europe.
If you bombed my country I wouldn’t buy squat from you!
You do make a good point though, Alex, good article.
And the Germans were their partners in WWII while we were the enemy.
What? This comment makes no sense, what is your point? The Germans also sell more cars than us in Japan, if you were trying to go against my comment.
Then andrew’s comment, this still proves my point for I haven’t bought an new Asian car, though I do have a used one. What is your point too? I’m confused. 🙂
Of course you’re confused
…Pearl Harbor, much!? Or is that another moon landing to some?
Or zee Germans? The world got stuck fighting the Central/Axis Powers twice.. 100million people died between those two wars
Pearl Harbor apparently doesn’t apply with regard to this bit of wisdom!
No one seems to focus on the obvious- all of the Cadillacs offered in Japan today are LEFT HAND DRIVE. Two of the four Chevy’s are as well. Japan is a right hand drive country. Why would any regular person buy a GM car which impacts on their ability to drive on their roads, pay toll operators and use pay-for-parking (you gonna get out of your car to retrieve the ticket and to pay for your parking when you leave?). Before 2011 Cadillac did offer the CTS sedan, wagon and STS in RHD and its sales did go up slightly, but it sold Cadillacs via independent dealers, not Cadillac stores, and RHD and LHD Caddy’s were sold on the same floor causing confusion, so of course sales were not stellar. If GM is serious about Japan, make the Corvette, Camaro, ATS, CTS, SRX and Escalade in RHD. Have a dedicated and extensive dealer network (Japan is so densly populated, it should be easy to have an extensive network with relatively few dealers). The problem is that GM always thinks it can make inroads into markets on the cheap- Japan (GM) and Europe (Cadillac) are fine examples of this.
My point exactly. American manufacturers (Ford being a distinct exception) have been routinely arrogant to believe that their vehicles are good enough for people to disregard the location of the steering wheel. England is not the only market for right-hook cars. India, South Africa, all of the English-speaking Caribbean, Australia, New Zealand, Japan, and many countries in South and South East Asia all DEMAND right hand drive.
The major reason Patrick, spot on.
Cadillac have tried to launch so many times in the UK but have failed spectacularly. The brief RHD experiment corresponded with a pathetic attempt to market through Cadillac’s European operation, via Vauxhall dealerships and with a rebadged Saab.
Cadillac now have the product – if they want to be serious about RHD markets they must set up country specific marketing and dealership networks. I suspect the will to invest in these markets just isn’t there.
It always astounds me that almost nobody in this country knows that BY LAW only Japanese auto makers may operate in Japan. Anyone seriously interested about the history or General Motors should take the time to at least listen to the C-Span podcast http://www.c-spanvideo.org/program/BillyA, which is a presentation by William Pelfrey, author of “Billy, Alfredd and General Motors” 2006, which documents the restrictions placed on foreign car makers by the MacArthur post-war occupation (the book is a great read and mostly not about Japanese/German issues). The myth that Japanese don’t want American vehicles primarily because of quality, content, etc. is ignorance personified. Having just watched the trailer for “Detropia” which documents the utter destruction of Detroit and much of the mid-west’s industrial base I’m doubly disgusted that there are still so many people in the U.S. who blame the American companies for all that has happened since 1945. Labor and management have their share of the blame but it doesn’t end there by a long shot. American foreign and economic policy has had it’s thumb on the scale with negative effect while Japanese and German governments have pressed to support their respective automobile industries.
Correct Henri. We have only two choices in this country. Republicans, who believe that a “free market” is the solution for all ails, while others play on the same field but by a different set of rules. And then we have Democrats, who believe that money falls from the sky.
But you are also correct in saying that management and labor are not without blame. Both groups have a distorted view of their worth. Those in the squeeze….the scientists, engineers, technicians, and true innovators. There are many countries, particularly in Europe (not Germany), where the issue is worse than the U.S., and it is now showing in their products and bottom line….a sign of what’s to come if we do not change course.
Henri, someone with some wisdom. and providing a reality check for us all, a breath of fresh air on this post… Thank you, good stuff, wish everyone could post this level of quality insite…
LOL. Come now Yaba…I’m sure you can appreciate Henri’s INSIGHT…
Buick is a #1 seller in China, try some Buick,s in Japan they are beautiful cars…..I belive the 2014 Chevy Impala will be a real winner in America and should have great potential for Japan…
Bill — Buick’s popularity in China doesn’t stem from selling “actual” Buicks, but is rather the result of it selling a cheap and rebadged Daewoo (the “original” Excelle):
http://gmauthority.com/blog/2012/02/what-is-this-buick-that-sells-20000-units-a-month-in-china/
However, Buick — as a whole — is more popular in China than anywhere else.
That said, GM wouldn’t be hurting itself by selling Buick in Japan… but it also needs to become more aggressive when it comes to selling the Chevrolet and Cadillac brands there. More models, more dealers, more promotions and more long-term brand building.
Buick is popular in china because it has a LONG and dignified history of being the car of choice for Chinese dignitaries. that is all.
GM smartly slaps the Buick badge on anything that even remotely appears market appropriate for china, and then laughs all the way to the bank…in China at least.
I think GM should introduce all these new Chevy models in right-hand drive for the Japanese and these other similar markets.GM needs to improve their marketing and manufacturing strategy, in order to increase sales and profits the world over. GM should seriously consider this global strategy to increase its foot-print all over the world.
Richard, I do agree with Henri’s Insight… 🙂 sorry for the spelling error…
Anyway, as I previuosly said, GM engineers and marketeers need to be more focus on the global objective.
1. These new Chevys that are supposed to be debut this year, all must find their way into latin American, European, and certainly other Asian markets. GM engineers need to focus more on upstaging their competitors in terms of quality and performance in order to woo customers away from the competition.
Example: The new Malibu should never come to the midsize market with a wheelbase that cramp adult rear seat occupants. The 2.5 engine is okay, but the transmission and engine should gave better performance numbers in mpg and 0-60 numbers that are equal or better than the Altima or Accord.
Hence I hope those intended improvements for the Bu can addressed the performance criteria I mention. Because I really think the Malibu is already one of the best looking cars in this segment, so to modify the exterior better make it better looking than its competitors.
2. GM need to be more responsive in all segments to keep up sales and not just hope that people will buy because of loyalty.
EXample: The Chevy Cruze should never soldier on so long with just that 1.4 turbo rated at 138bhp, while the Focus, Mazda3 and Kias base 2.0s are all rated 160bhp plus.
Hence, GM should have brought and improved base and top of the line engines to the market much sooner for the Cruze and the Sonic in order to be more competitive in their segments. Exterior upgrades for both cars would do them much good too.
3. GM should never have debut the ATS with out that promise 8-speed tranny for future GM Cars and Trucks. Seriously every other competior has 8-speed transmissions in their cars. What the hell GM and the other Detriot auto-makers are waiting on. These things I mention are very Key for maintaining a competitive edge in the market.
VW is really agresive compared with GM an example of North African market which the top 3 include renault hyundai and peugeot just after you have chevrolet VW and toyota for VW it grows significally even if new owners wait 6 month for their golf,passat if its too long they just by a Seat leon or Ibiza or a Skoda.for luxury brand Cadillac dust compete with the Escalad and people prefers the audi brand and Bmw.GM have a big effort to do here with Chevrolet propossing the Spark (Deawoo Matiz) the new Spark the Aveo hatch and sedan, the Sail hatch and sedan, the Sonic hatch and sedan, the Optra only in sadan (this car is apreciated here), the Cruze hatch and sedan and the Captiva. There is a lot of sub compact cars and no mid sized car no malibu,no diesel engine for the Sonic and in the region people likes diesel engines for fuel economy.Opel proposes only the Corsa,Astra and Insigna comparing to VW its not suficiant.
Toyota is feeding on the “American” heartstrings. They had a Tundra move the Space Shuttle Endeavour with a very large “Made in America” painted across the bumper. That is pure bull manure, but NASA has it on every official bulletin and Toyota is showing it during their latest ads. So even our government has helped the Japanese fool our nation!
If the Tundra is assembled in America, it has parts manufactured in Japan, so it was really born in Japan. And Toyota in Japan gets the cash.