Joint US-Japan Study Blames Both Sides for Car Industry Failure in Japan

Strategic Insights -

A comprehensive two-year study jointly conducted by the United States and Japan has revealed that the failure of US car companies Chrysler Corp., General Motors Corp., and Ford Motor Co. to prosper in Japan can be attributed to both countries. The study suggests that while Japanese consumers show a strong preference for imported cars, US car manufacturers have failed to adapt their products to meet the demands of the Japanese market.

Key Takeaways:

  • The study found that about 18% of Japanese consumers who own an expensive car indicated they want to buy an imported car next time around, with 70% saying they would at least consider buying one.
  • U.S. cars are usually made to meet U.S. standards and then modified to suit the Japanese market, which the report says is necessary to expanding sales.
  • Only 40% of Japanese dealers handle imports, compared to a ratio of 94% of U.S. dealers.
  • Foreign car companies weigh many factors, from investment timing to economies of scale and product fit, before stepping up efforts to increase sales in Japan.
  • The study suggests that some employees of foreign vehicle manufacturers believe that their parent companies' commitment to sell vehicles in Japan was not sufficient.
  • Japanese Prime Minister Morihiro Hosokawa has stated that his government does not believe there are restrictions to the sale of vehicles in Japan, contradicting the report's findings.

Statistics:

  • 18% of Japanese consumers who own an expensive car indicated they want to buy an imported car next time around.
  • 70% of Japanese consumers said they would at least consider buying an imported car.
  • 40% of Japanese dealers handle imports.
  • 94% of U.S. dealers handle imports.
  • The Japanese car market is the second-largest in the world, after the U.S. market.

Sources:

  • Reuters News Agency

Washington A report based on a joint two-year study by the United States and Japan says both countries are to blame for the failure of U.S. car companies Chrysler Corp., General Motors Corp. and Ford Motor Co. to prosper in Japan.

  • The American Automobile Manufacturers Association,

"A report shows what the American and European car makers have been saying for some time - that the Japanese market is closed," said Jason Vines of the American Automobile Manufacturers Association.

  • The Japanese Automobile Manufacturers Association,

"The association's long-standing position is that we don't believe there are restrictions to the sale of vehicles in Japan and we would be surprised if the study, when it is released, demonstrates that there are."