By on July 7, 2013

Ford Setagaya Dori

 

And here, by popular demand, the sales of cars imported to Japan in June, and for the first half year of 2013, as published by the Japan Automobile Importers Association.  For those with open eyes and mind, a few items quickly become clear:

Imports to Japan, June 2013
June 2013 vml]>vml]>

  January – June 2013
2013 Share 2012 Growth 2013 Share 2012 Growth
Volkswagen Grp 10,075 29.1% 8,573 17.5% 49,660 29.1% 43,103 15.2%
Volkswagen 6,662 19.2% 5,751 15.8% 32,842 19.2% 28,897 13.7%
Audi 2,930 8.5% 2,403 21.9% 14,356 8.4% 11,974 19.9%
Bentley 16 0.0% 19 -15.8% 93 0.1% 79 17.7%
Lamborghini 15 0.0% 19 -21.1% 96 0.1% 78 23.1%
Bugatti 1 0.0% 0 1 0.0% 2 -50.0%
Porsche 451 1.3% 381 18.4% 2,272 1.3% 2,073 9.6%
BMW Grp 6,605 19.1% 6,231 6.0% 29,329 17.2% 27,606 6.2%
BMW 4,867 14.1% 4,681 4.0% 20,887 12.23% 19,284 8.3%
BMW MINI 1,724 5.0% 1,532 12.5% 8,298 4.86% 8,242 0.7%
BMW Alpina 4 0.0% 12 -66.7% 96 0.06% 40 140.0%
Rolls Royce 10 0.0% 6 66.7% 48 0.03% 40 20.0%
Daimler 5,943 17.2% 4,672 27.2% 25,007 14.6% 20,289 23.3%
Mercedes-Benz 5,735 16.6% 4,384 30.8% 24,339 0.14 19,669 23.7%
smart 208 0.6% 287 -27.5% 662 0.00 609 8.7%
Maybach 0 0.0% 1 -100.0% 4 0.00 6 -33.3%
Unimog 0 0.0% 0 2 0.00 5 -60.0%
Nissan 3,235 9.3% 3,550 -8.9% 20,194 11.8% 23,264 -13.2%
Fiat-Chrysler 2,343 6.8% 2,110 11.0% 9,363 5.5% 9,125 2.6%
Fiat 897 2.6% 644 39.3% 3,340 0.02 2,823 18.3%
Jeep 518 1.5% 595 -12.9% 2,246 0.01 2,461 -8.7%
Chrysler 399 1.2% 57 600.0% 1,194 0.01 334 257.5%
Alfa Romeo 385 1.1% 663 -41.9% 1,653 0.01 2,447 -32.4%
Dodge 59 0.2% 84 -29.8% 430 0.00 607 -29.2%
Ferrari 59 0.2% 42 40.5% 291 0.00 234 24.4%
Maserati 24 0.1% 19 26.3% 163 0.00 148 10.1%
Lancia 2 0.0% 6 -66.7% 46 0.00 71 -35.2%
Toyota 1,454 4.2% 1,466 -0.8% 8,477 5.0% 8,475 0.0%
Volvo 1,888 5.5% 1,624 16.3% 7,398 4.3% 6,681 10.7%
Mitsubishi 846 2.4% 0 7,841 4.6% 2 391950.0%
PSA Group 808 2.3% 940 -14.0% 4,416 2.6% 4,988 -11.5%
Peugeot 590 1.7% 627 -5.9% 2,983 0.02 3,080 -3.1%
Citroen 218 0.6% 313 -30.4% 1,433 0.01 1,908 -24.9%
JLR Group 445 1.3% 225 97.8% 2,291 1.3% 1,267 80.8%
Jaguar 101 0.3% 108 -6.5% 499 0.00 537 -7.1%
Land Rover 344 1.0% 117 194.0% 1,792 0.01 730 145.5%
Ford 335 1.0% 309 8.4% 2,146 1.3% 1,858 15.5%
General Motors 269 0.8% 301 -10.6% 1,580 0.9% 1,577 0.2%
Cadillac 119 0.3% 125 -4.8% 772 0.00 665 16.1%
Chevrolet 127 0.4% 151 -15.9% 692 0.00 734 -5.7%
Hummer 12 0.0% 15 -20.0% 58 0.00 116 -50.0%
GMC 10 0.0% 8 25.0% 46 0.00 54 -14.8%
Pontiac 1 0.0% 1 0.0% 7 0.00 7 0.0%
Buick 0 0.0% 5 0.00
Saturn 0.0% 1 -100.0% 0.00 1 -100.0%
Renault 201 0.6% 353 -43.1% 1,606 0.9% 1,525 5.3%
Suzuki 101 0.3% 3 3266.7% 930 0.5% 413 125.2%
Lotus 27 0.1% 16 68.8% 168 0.1% 134 25.4%
Aston Martin 25 0.1% 12 108.3% 118 0.1% 65 81.5%
Mclaren 6 0.0% 0 43 0.0% 1 4200.0%
Honda 6 0.0% 10 -40.0% 39 0.0% 153 -74.5%
Hyundai 5 0.0% 6 -16.7% 27 0.0% 43 -37.2%
Rover 3 0.0% 4 -25.0% 22 0.0% 34 -35.3%
Morgan 2 0.0% 0 18 0.0% 5 260.0%
MG 0 0.0% 0 5 0.0% 5 0.0%
Scania 0 0.0% 5 0.0%
Saab 1 0.0% 6 -83.3% 3 0.0% 14 -78.6%
Autobianchi 1 0.0% 0 2 0.0% 1 100.0%
Kia 0 0.0% 1 -100.0% 2 0.0% 1 100.0%
PROTON 0 0.0% 1 0.0%
Detomaso 0.0% 0 0.0% 1 -100.0%
RUF 0.0% 0 0.0% 1 -100.0%
Ssangyong 0.0% 0 0.0% 2 -100.0%
Zagato 0.0% 0 0.0% 1 -100.0%
Others 7 0.0% 5 40.0% 37 0.0% 34 8.8%
Total  34,631 100.00 30,417 13.9% 170,728 100.00 150,668 13.3%
Source: Japan Automobile Importers Association
  • Complaints of a closed market are nonsense. Quite evidently, car imports to Japan are alive and well.
  • Imported cars are the best performing segment in Japan. Imports were up 13.9 percent in June, while the total market was down 10.8 percent, and while even sales of the vaunted kei cars were down 2.3 percent.
  • The Volkswagen Group continues to be Japan’s largest importer. Three out of ten cars imported to Japan come from the Wolfsburg-based company.
  • Compared to the cars imported by European makers, imports by Ford and GM are anemic. Ford and GM are the loudest complainers about closed markets and onerous technical standards. At the same time, they omit that most of their cars come in under Japan’s Preferential Handling Procedure. It allows small series of up to 2,000 units into the country with the barest of paperwork.
  • The Preferential Handling Procedure opens the door to imports which would never make it beyond U.S. borders. America does not have this procedure. Europe does. Japan’s borders are even open for a handful of Hummers, Pontiacs, and the odd Saturn. Try bringing a non-federalized  car to the U.S., and you will experience a boarded-up market.

The numbers also help to debunk a few rumors. Commenter BD2 said that “roughly half the imports are actually Japanese models” built elsewhere and imported into Japan. And that for the other half, “the vast majority are German luxury autos.” Bunk.

  • Japanese makers had 21 percent of all imports in the first six months of the year. For them, it was cheaper to produce elsewhere and to import, while being exposed to the same importation rules and zero percent tariffs as foreign makers.
  • Japan’s best-selling imports are small compact cars made by Volkswagen, the Golf, the Polo, and lately the Volkswagen Up!

While growing, the market for imported cars remains limited in Japan.  Four out of ten cars sold in Japan are 0.6 liter minivehicles. Importers have no offer in the kei car segment. To drive an imported car is a display of individualism in Japan. Individualism is not big in Japan, a country where people want to blend in, not stand out.  A low share of imported cars is no proof of a closed market. It simply is a reflection of customer preferences.

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123 Comments on “Imports To Japan Strong, Despite Claims By Detroit That The Market Is Closed...”


  • avatar
    Summicron

    Meh…. the earth is still flat.

    • 0 avatar
      CelticPete

      The market is not closed. But its protected by the devalued yen. You can rerun this story as much as you want. But the Japanese government has devalued their Yen nearly 25% last I checked.

      Imagine in the US if all our money bought 25% less imported stuff. That’s a huge difference. Ignoring this argument won’t make it go away.

      • 0 avatar

        The yen is not “devalued.” It was grossly overvalued and is simply coming back in the direction of normal territory. At 100 to the $, the yen still is overvalued.

        The change in the currency does not seem to keep the imports out. Despite a lower yen, import sales are up.

        • 0 avatar
          CelticPete

          #1. Yen Devaluation is widely acknowledged in the Business community and by the Japanese government itself. You expose your agenda if you deny it. It’s not even a debate.

          #2. The Japanese import market is miniscule. VW sold 10,000 cars? Audi sold 137k cars here last year. That’s just Audi not the whole VW group.. The Germans are not doing well in Japan – just better then US makers. Korea a global powerhouse is non-existent in Japan..

          I don’t even understand the point of these articles. Yes the Japanese don’t need tariffs because they manipulate their ENTIRE CURRENCY.

          Don’t get me wrong – the US government has been manipulating our stock market for politcal gain as well via quantitive easing. So its not like we are immune to this criticism. But Japan has taken it to unheard of heights..

          • 0 avatar
            billfrombuckhead

            Carlos Ghosn demanded the Japanese government intervene in currency markets.

            http://www.bloomberg.com/news/2012-12-31/nissan-s-ghosn-calls-on-abe-to-weaken-yen-mend-china-ties.html

            Japan make a mockery of so called “free trade”. Adam Smith would cry if he saw what was done in the name of “free trade”.

          • 0 avatar

            Instead of listening to what is “widely acknowledged” I would establish my own opinion, based on facts.

            For instance on this long term yen chart. At 100 to the dollar, the yen still is way too expensive. 120 would look normal:

            http://3.bp.blogspot.com/-ZmhVth1l1Uc/ULUlx39lNeI/AAAAAAAAJio/kODRUiW96OQ/s1600/USD-JPY.png

            Alternatively, I suggest coming to Japan with dollars, and see how far the dollar will get you with those “cheap” yen.

          • 0 avatar

            “Yen Devaluation is widely acknowledged in the Business community and by the Japanese government itself. You expose your agenda if you deny it. It’s not even a debate.”

            +1. I don’t understand why you have to deny something the Japanese govt themselves acknowledge to doing. Are you suggesting that BOJ is lying every time the disclose how many billions they have spent each month devaluing their currency. Is it just a figment of my imagination that Japan has doubled monthly bond purchases and surpassed China at holding the most treasury notes. Nary a peep on this site from those who whine about govt intervention for GM restructuring. Japan spends nearly $600 billion EVERY YEAR devaluing their currency. It is no secret that a cheap yen benefits the Japanese automakers. Compare that to a one time loss of $10 billion spent on GM (if you ignore how much more tax payers would be on the hook for if GM had been shutdown). You cant have it both ways. You can’t chose when Free Market Principles have to apply. Free market decided the yen to remain at the 75 to a dollar level before the new japanese president came in and let BOJ run wild.

            How do you define a normal level for the yen? Compare it to 20 year ago levels? A lot has changed in that time. Most foreign transactions and trade exclusively used the dollar. Not anymore. Why is the Yen weaker than the currencies of most third world nations. Shouldn’t a developed country like Japan with no trade deficits, high exports, high per capita income have a stronger currency than much poorer countries. You know what is normal? Whatever the market decides it is and the free markets overwhelmingly decided the yen to stay at 75 to a dollar levels.

            I know we are supposed to roll over and buy into this like most on this site. Too bad a few of us can think for ourselves. Until recently Japan was the second largest auto market. GM, Ford, VW, Hyundai and others have local assembly plants in almost all markets, most only a fraction a size of Japan. Why aren’t there any in Japan? GM and FORD are the top two automakers in UK, a market most similar(RHD, high taxes and high gas prices) to Japan. Why do Ford and GM have to import LHD vehicles to Japan? Why is a Ford Focus 50% more expensive than a corolla and why is a Chevy sonic 50% more expensive than a Fit? Why is a Rav4 with the same displacement only half the price of Chevy Captiva? Why is a Camaro with the same displacement as a V6 Rav4 cost as much as a Lexus GS?

            A weak yen benefits the Japanese automakers and a strong yen benefits the US automakers. Who do you want to benefit? I have no shame in saying I want american automakers to benefit. Honda profits are up 77% in 2012(still 30% less than GM’s profits and only half of Ford’s) thanks to the low yen. That is record jump YOY after the Yen devaluation began.

            Showing some barely negligible import numbers and claiming there are no restrictions for foreign automakers is like showing some crime numbers for New York and claiming there are no laws against in american cities.

          • 0 avatar
            juicy sushi

            Looking at the movements of the US dollar over the past decade and its effect on other currencies, the yen valuation debate is a glass house issue.

            The Japanese market is not closed. The amount of effort necessary for gaining significant market share in Japan exceeds the level Detroit is willing to put in.

        • 0 avatar
          jimmyy

          “Yen Devaluation is widely acknowledged in the Business community and by the Japanese government itself. You expose your agenda if you deny it. It’s not even a debate.”

          As a wall streeter, I will call you out on this one. Currently, the Yen is substantially overvalued. This severe overvaluation is due to our Fed, which is printing 85 billion per month via quantitative easing. This non stop money printing by the Fed has done serious damage to the Japanese economy by causing the JPY to be overvalued. This policy is called “beggar thy neighbor”. Now, the Japanese have had enough, and they are doing a little printing of their own in order to push the Yen back down to fair value, which should be around the 115 to 120 mark.

          Anyone why buys the Japanese is a currency manipulator story lacks a basic economics 101 class. Google “beggar thy neighbor”.

          • 0 avatar
            jimmyy

            To give a little perspective, the US has printed the most money in the history of the world. This has put serious downward pressure on the USD. And, this is the main reason why the auto industry in Detroit has come back. It increase the prices on all the foreign autos and parts. But, Mullay is worried. He knows the FED manipulated USD can not last. This manipulated USD allowed Detroit to sell us vehicles at high prices which allowed the UAW to prosper on the backs of the car buying public. It also brought the inefficient auto parts suppliers around Detroit to make a comeback. But, the rest of the world is done with this. A currency war is in the cards, and when that happens, the USD will appreciate, and Detroit will become uncompetitive again. I would be a seller of Detroit real estate.

      • 0 avatar
        ccode81

        I can not recall one single name who offered price cut while 1 dollar was 80 yen. and don’t see anyone raising price after it came back to 100 yen per dollar. Retail price is much more stable than FX market.
        Regardless what the currency rate is, Ford Mustang base V6 model is 4.3 million yen here for long time. (USD53,750 when FX is 80, USD43,000 when FX is 100). Ford, can’t try better?

    • 0 avatar
      challenger2012

      “More Fiction from the Mind of Mr. Schmitt”, should be the title of this article. Bertel states how open the Japanese Market is, yet offers no explanation as to why if the Japanese Auto Market is so open, not a single foreign auto maker builds in Japan. Furthermore; a quick look at the numbers reveals a calculated deception in that almost 22% of the cars imported are Japanese brands i.e. Nissan 11.8% , Toyota 5%, Mitsubishi 4.6% and Suzuki .5%. The numbers get even more wacky when you realize that exactly 50% of the actual 78% are high end cars by Audi, BMW and MB. Where in any car market do 50% of the imported cars sold are luxury? Am I the only one who thinks this number is a bit odd?

      @al from Oz
      These are your words, “The Japanese (and others, notably Germans) vehicle manufacturers concentrated on developing a global market since the 70s.” Any explanation why since the 70’s the Germans have not been able to crack the Japanese market or anyone else?

      • 0 avatar
        niky

        So you’ve missed the point where even the Japanese prefer NOT to build in Japan? Cars built by Japanese workers and robots inside Japan are more expensive than cars built by foreign workers and Japanese robots outside of Japan.

        This is the same reason US makers build outside the US, in Mexico and Canada. Japanese makers build inside the US because it’s cheaper to build them there than in Japan.

        Cracking the Japanese market would take local production (which is a losing proposition) and the ability to convince patriotic Japanese buyers that your foreign car is just like any other Japanese cars (which is impossible. Unless you’re Renault and the Japanese view your man, Ghosn, as God).

        And then you’ll have to build Kei cars, whose development you can’t justify by building variants for other markets, as Kei cars won’t sell in big volumes outside Japan… not even in India, where the best-selling Alto is based on an old Kei car. Kei cars have too little engine and cost too much for India.

      • 0 avatar
        RobertRyan

        @Challenger2012
        You asked exactly the same question before and as Niky says below even the Japanese do not want to build in Japan, they build elsewhere.

  • avatar
    strafer

    Only the German brands are doing well in Japan.
    USA and Korean imports are but a tiny fraction of German cars.
    The old Axis alliance is paying off.

  • avatar
    billfrombuckhead

    What part does racism play in the poor results for Korean and American cars?

    Maybe if American and Korean car makers could get their quality up to VW levels?

    Japan is the gold medal winner of currency manipulation and any American who complains about about US government debt and rewards the Japanese economy for running a world leading debt is beyond a hypocrite. Japanese debt per capita is 3 times G7 average

    http://www.zerohedge.com/news/2012-10-23/mushroom-cloudy-future-2016-japan-net-debt-capita-will-be-140000

    • 0 avatar
      Hummer

      My sarcasm meter must be turned off.

      Get quality of American and Korean “up” to VW?

      I want to elaborate my thoughts but I feel I’ll make myself look dumb for not noticing the hopefully implied sarcasm.

      • 0 avatar
        CelticPete

        I happen to like German cars. But the quality of VW is not that strong. And – the Korean quality is considered very good now.

        There are two issues here – is the market closed? Do the Japanese want american/korean cars?

        I think the answer is the market is protected via currency manipulation. And the second answer is – they don’t want Korean or American cars anyway – outside of special boutique models.

        • 0 avatar
          Big Al from Oz

          @CelticPete
          I think there are a few out their who consider the badge on the hood indicates the origin of the vehicle. An import in the US comes from outside of NAFTA.

          Overall US or NAFTA manufactured vehicles are below par with the Asian (Japanese, Korean, Thai), Euro manufacturers.

          The locally manufactured US vehicles have come ahead in leaps and bounds over the past 10-15 years.

          But true imports from Asia and Europe are still of better quality. They have also made significant inroads into quality.

          My mother bought a Mexican made Focus last year, the quality of it is somewhere between a Chinese vehicle and a Japanese vehicle. It reminds me of the quality that the Japanese had in the late 80s and early 90s.

          Korean vehicles (actually from Korea) are almost on par with Japanese and Euro vehicles.

          We get US vehicles here in Australia and they compete directly with the Koreans in cost and equipment, not quality, they have more to go.

          The Jeep Grand Cherokee here is touted as a budget buy, good value vehicle that has lower quality than its Asian competitors.

        • 0 avatar
          krhodes1

          Depends on your definition of “quality”. Quality is not ONLY reliability, though it is certainly a component of it. A BMW will probably not be as reliable or as cheap to fix as a base-model Dodge Avenger, but I don’t think even a card-carrying UAW member would consider a Dodge Avenger to be a higher quality car.

          In exchange for slightly lower levels of reliability and slightly higher costs a VW gives a “German” look and feel that has value to some. And they certainly have some badge appeal. Ultimately historically American cars are meant for America, much more so than cars from other countries. I cannot even imagine a country with a more different automotive environment than Japan. Note that the “Japanese” cars sold in America are generally NOT the Japanese cars that sell in Japan. We get very much Americanized Japanese cars.

          • 0 avatar
            Big Al from Oz

            @krhodes1
            The percieved quality derives from actual quality. Don’t confuse longevity with quality.

            I have a cheap Chinese hammer from the early 90s, but it is of cheap quality and it hasn’t broken but the face on my Plumb hammer splintered off. Even though the Plumb was of better quality.

            If the US wants to export first it must have vehicles that others want. Then produce the expected quality others expect from an imported vehicle.

            Then to gain access to an export market the US must become like Japan, Australia and the rest of the UNECE (world) for vehicle harmonisation, ie EuroVI, ENCAP, ANCAP, no chicken tax, etc.

            In other words open its market up to the global economy.

            Detroit can’t sit and whine about non-existent protection by the Japanese when the US vehicle industry is loaded with barriers.

            That’s hypocritical. Don’t do as I do, just do as I say. That form of wheeling and dealing might have work in the past for the US, but it will be harder to convince the world as time goes by.

        • 0 avatar
          bd2

          Hyundai is the top ranked automaker in AutoBild’s reliability report 2 years running while VW is still towards the bottom.

          No “homefield” advantage for VW there.

          • 0 avatar
            RobertRyan

            “No “homefield” advantage for VW there”
            Despite VW’s growth it has nagging quality issues.

      • 0 avatar
        niky

        Initial quality is more important in Japan than longevity. In Japan, very strict and difficult certifications create a high turn-over of vehicles. Due to the strict certification process, owners tend to take good care of the vehicles. Due to the expense, they tend to sell them early.

        This makes Japanese secondhands hugely valuable outside of Japan. Low price. Great condition.

      • 0 avatar
        billfrombuckhead

        It is sarcasm. We keep hearing American cars don’t have enough quality but somehow in Japan VW does. To me the proof Japan is de facto closed is export powerhouse Korea withdrawing from Japan.

        • 0 avatar
          RobertRyan

          @billfrombuchead,
          Do not know about Japan but VW has been rapidly increasing market share in Australia.
          Hyunday/Kia produce Japanese clones and their is strong antipathy between Korea and Japan.
          “American cars” are rehashed Opels and in Ford’s case based on some Volvo architecture.

          • 0 avatar
            bd2

            It’s the Japanese who have been trying to copy the charge in auto design that Hyundai and Kia have been doing and Samsung Galaxy smartphones are popular in Japan as is K-pop.

            Hyundai, Kia and Ford have seen immense growth and/or demand for their products all around the world with the exception being the Japanese auto market.

            And if there is to be any antipathy, it would be on the Korean side since it was Korea who suffered thru brutality during the Japanese occupation, but meanwhile, sales of Japanese autos are once again growing in Korea now that the value of the yen has fallen.

          • 0 avatar
            RobertRyan

            @bd2″Hyundai, Kia and Ford have seen immense growth and/or demand for their products all around the world with the exception being the Japanese auto market”

            Hyundai/Kia as a corporation has been growing rapidly correct. Ford outside NA has been rapidly LOSING marketshare, Stagnant in BRIC Counties like Brazil, losing ground in Europe and Australia and not making much headway in south East Asia , India or China.

          • 0 avatar
            bd2

            Ford is by far the no.1 brand in the UK and you must have missed the sales growth Ford is seeing in China (as they just started expanding production in China).

            For all of Europe, Ford is the no.2 auto brand and Russia is now Ford’s 3rd largest market in Europe (and Ford recently broke ground on another plant in Russia) and Ford Brasil has a 10% share – a far cry from its share of the Japanese market, much less VW’s.

          • 0 avatar
            RobertRyan

            @bd2,
            “Ford is by far the no.1 brand in the UK and you must have missed the sales growth Ford is seeing in China (as they just started expanding production in China).”

            Problem is it losing a LOT of Money. If you see a “widget” and let us say you sell a lot of them, but lose money on everyone of them, you have a huge debt,
            GM was having booming sales before it went into bankruptcy

            “What has reliability got to do with it” A lot, eventually people will turn away from Ford and go to more reliable brands.

  • avatar
    Big Al from Oz

    The reality the Japanese economy has been in the doldrums for over 2 decades now. I remember when the USD bought 200 Yen in the late 80s. The super greenback.

    The US can’t complain about devaluing currency, that’s what it has been doing since the GFC along with the Eurozone including the UK.

    As for a protected Japanese market, yes they do have a strong rice farming lobby group. Yes the big Japanese corporations are in the politicians pockets.

    But is the US any better? Is the Eurozone any better?

    I think most US citizens will be surprised to find out their country is heavily reliant of handouts, subsidies, tariffs as well.

    The chicken tax article below highlights this, but there is more protection the and technical barriers the US uses to protect its vehicle market ie, CAFE, design regs and refusing to meet the UNECE vehicle harmonisation.

    All of these small technical barriers and taxes protects Detroit. Detroit will use the UAW when needed.

    The funny thing is a politician, like the UAW and Big 3 are interested in themselves not the country.

    • 0 avatar
      billfrombuckhead

      Effect of the Plaza Accord
      “In 1985 a dramatic change began. Finance officials from major nations signed an agreement (the Plaza Accord) affirming that the dollar was overvalued (and, therefore, the yen undervalued). This agreement, and shifting supply and demand pressures in the markets, led to a rapid rise in the value of the yen. From its average of ¥239 per US$1 in 1985, the yen rose to a peak of ¥128 in 1988, virtually doubling its value relative to the dollar. After declining somewhat in 1989 and 1990, it reached a new high of ¥123 to US$1 in December 1992. In April 1995, the yen hit a peak of under 80 yen per dollar, temporarily making Japan’s economy nearly the size of the US.[16]”
      http://en.wikipedia.org/wiki/Japanese_yen

    • 0 avatar
      DenverMike

      The UNECE intentionally screwed US OEMs by designing regulations exactly opposite of US regs. They zig everywhere US regs zags. Now US regs should conform to UNECE???

    • 0 avatar
      DenverMike

      Anytime the “Chicken tax” is brought up without mentioning its easy loopholes/workarounds that neuter it and make it irrelevant, is cut and dry propaganda. Especially if it’s the UAW.

      • 0 avatar
        niky

        The loopholes which have been closed? A fair tax shouldn’t have to be worked around.

        • 0 avatar
          DenverMike

          No loopholes have closed since Jan, 1980. Except the BRAT loophole in ’89. So it’s just as much an “open market” as it is for import cars. So of course any mention of the “25% Chicken tax”, without also mentioning its loopholes proves they have and agenda.

          The point is, there ARE loopholes to exploit. The EU’s answer to the Chicken tax has no loopholes what so ever.

          • 0 avatar
            niky

            Jumping through hoops costs money. Just because you can jump through an extra hoop and spend extra cash building parts you have to send to the shredder doesn’t mean it won’t be easier and cheaper if you didn’t have to.

          • 0 avatar
            DenverMike

            Nothing’s easy, but if assembly is going to harm an OEM, they’re in the wrong business. It just comes down to dollars and it costs about the same to do the ‘workarounds’ as it does to pay the 2.5% tariff on import cars.

            There’s plenty of world cars (French?) that would be sold in the US if it wasn’t for those pesky tariffs and regulations.

            Why anyone snivels about global trucks not sold in the US while not mentioning the travesty of living without equally banned Peugeots and stuff is bizarre.

  • avatar
    doctor olds

    Only one import brand manages even 1%! The biggest selling import brand, VW, edged up to 1.2% and all non-Japanese make imports combined total 4.9% of Japan’s market. It takes imagination to use this data to support the contention that the market is open.

    Data actually shows that even the most aggressive importer is struggling just to get single digit penetration.

    This empirical evidence supports the contention there are non-tariff barriers to entry cited by people actually in the car business, such as Mullaly, and refutes the notion that the market is “open”.

    Spinning these numbers to reach that conclusion is like defending Saddam Hussein’s elections in which he got 95% of the vote as “free”.

    Both notions are nonsense.

    • 0 avatar
      Big Al from Oz

      @Doc Olds
      What you are saying might be true.

      But a change in a market like a vehicle market takes 20 years to occur.

      In Australia we liberalised our vehicle market starting back in the early 80s. It has taken more than 20 years for the market to get a footing. Even then new players come and changes again occur.

      When did Japan unregulate it’s vehicle market? How long ago was it and how much longer will change occur.

      • 0 avatar
        bd2

        The Japanese auto market is much more mature than the Korean auto market and yet it’s the Korean auto market where the imports have an 11% share whereas in Japan it’s only 5%.

        And that’s not counting sales for most of GM Korea and Samsung Renault which are now foreign brands.

    • 0 avatar
      juicy sushi

      The market is open, the question you need to ask is what is the case foreign cars make for themselves? Why buy a Golf or a Focus rather than a Corolla or Prius?

    • 0 avatar
      bd2

      Exactly!

      Take out the Japanese imports (after all, when we talk about import sales in the US, we include the Japanese, Korean and European models built in the US) and pretty much all you have left are the German luxury brands (which do relatively well everywhere) and VW having more than token sales in Japan.

      And even for VW with its 1.2% share of the Japanese market, is not that far off of what Nissan imports into Japan.

      BS continuing on and on about how the Japanese market is an “open market” is frankly well, BS.

      There’s a reason why import brands (even the Europeans) pass over the Tokyo Motor Show while they all attend the Seoul Motor Show despite the Korean auto market being a good bit smaller.

      It’s the same reason why BMW decided to build its Asia driving center in Korea and not Japan.

      The Ford Fiesta and Focus are big seller pretty much the world over – including in China were sales of the Fiesta and Focus have seen huge increases and yet, Ford can’t make a dent in Japan when it comes to sales (they sell in Europe in big nos.).

      • 0 avatar
        niky

        The Focus is a European product. Which is why it sells well there.

        China is an expansion market. But also, their Focus is different from everyone else’s.

        In the rest of Asia, the Focus doesn’t sell all that well. Too big. Too heavy. Wrong engine mix. The Fiesta is a better seller in developing markets.

        And why carp about Focus sales in Japan, when the market is so unfriendly to gasoline-powered “compacts” that Honda chose to let the Civic die off?

        • 0 avatar
          Big Al from Oz

          @Niky
          My mother bought a new Focus last year in the US, it’s made in Mexico.

          It is different to ours, the materials used for the interior are not very good. Panel fit was substandard, as was the paint job.

          I think our Focus’s is imported from Sth Africa. Now why is it that Sth Africa can build a Focus of nearly the same quality of a Japanese vehicle but NAFTA can’t.

          This leads me to believe that US vehicles are also ‘built down’ in some instances due to cost pressures.

          My brother also in the US bought a Kia Soul last year as well. The quality difference between it and my mother’s Focus was chalk and cheese.

          The US manufactured Kia was still sub par to the Korean Kia Souls we are getting in Australia.

          In France my cousin has a diesel Focus, the same thing to quality was better than the NAFTA vehicle.

          I think expectations are different globally, this impacts the quality of a vehicle.

          In the US maybe they think the quicker a vehicle self destructs and requires replacement is a better design feature. And in Sth Africa and the Eurozone people want quality and expect vehicles to last longer.

          The same could be said for our pickup and SUVs we are getting here in Australia and SE Asia, we want vehicles to last longer.

          But we are paying more for this.

          • 0 avatar
            ajla

            Three problems with your story:

            1. There is no Kia Soul production in North America. Almost all of our Kias are built in South Korea. So Kia has separate “low quality” lines for North American exports?

            2. The US Focus is built in Michigan, not Mexico.

            3. Where do you think the vast majority of those BMW SUVs come from? Do you think that plant has a “high quality” line for the exports?

          • 0 avatar
            Big Al from Oz

            @ajla
            Sorry, you are correct the Focus is from Wayne, Michigan and the Soul from I would suspect Korea.

            The story I was told when I questioned my brother and mother on the vehicles was what I stated, I should have used google, like I tell everyone else to do.

            But the story is the same the Kia is chalk and cheese in comparison to the Ford. The Ford is quite ‘rough’.

            The Kia was of a higher standard, but not up to Japanese standards or to the standard of the Kia Sorento and some of the other Kia’s I looked at here.

            Dearborn should maybe look at he quality of the ‘global’ Focus’s and set that standard for the US.

        • 0 avatar
          bd2

          And b/c the Focus is a European product, it has higher levels of refinement and a better interior than in the chinzy Corolla.

          And while having modest 1.2% share of the Japanese market – what’s the rationale behind VW being the leading non-luxury import brand; after all, it’s products are developed for the Euro market.

          • 0 avatar
            RobertRyan

            The Focus has major quality issues in Europe, better than the Daewoo produced Chevrolet.
            JD Power UK Quality survey 2013
            Ford and “Chevrolet” are well down the list
            http://www.autoexpress.co.uk/car-news/driver-power/63990/best-car-2013

          • 0 avatar
            bd2

            What does reliability have anything to do with it.

            The Focus is a huge seller in Europe and for much of the rest of the world.

      • 0 avatar
        RobertRyan

        @bd2,
        “and pretty much all you have left are the German luxury brands (which do relatively well everywhere) and VW having more than token sales in Japan.”

        You just summed up the imports they want.Not interested in anything else.

        • 0 avatar
          bd2

          That’s exactly the point.

          In all of the other major auto markets – VW, Hyundai, Kia and Ford do very well and/or have seen immense growth with the OUTLIER being the Japanese market.

          • 0 avatar
            RobertRyan

            @bd2 I can see your argument, but why would the Japanese buy Hyundai/Kia they are very similar to their products. Ford as I stated earlier is struggling outside NA, not growing

          • 0 avatar
            bd2

            @RR

            Hyundai and Kia aren’t exactly like the Japanese, bringing more style (esp. Kia) to the table.

            Why would an increasing no. of Americans now purchase the Koreans when they have been purchasing Japanese for so long?

            Why do Hyundai and Kia now have a marketshare in Europe that is on par with Toyota, Nissan and Honda put-together when the Europeans have been exposed to the Japanese brands for much longer?

            Why are Japanese imports once again increasing in sales in the Korean market (now that the yen has fallen) when Koreans can just buy Hyundai and Kia?

    • 0 avatar
      RobertRyan

      @Doctor Olds
      Why would the Japanese buy VW? for that matter, They tend to produce vehicles for virtually all niches. The German and Italian Exotica is something they do not have and WANT. The rest is not going to excite them.

      • 0 avatar
        bd2

        Toyota actually has 2 lines of luxury sedans for the Japanese market – the Lexus brand and the Toyota Crown lineup (as well as the flagship Toyota Century).

        Nissan, Mitsubishi and other Japanese autmakers also had flagship luxury sedans for the Japanese market but over the years, they have all been cancelled (such as the Nissan President) due to competition from the Germans.

        So it’s not really true to say that the Germans are providing something that the Japanese automakers are/were not doing – since the Japanese automakers have long been building/selling luxury sedans in Japan.

        • 0 avatar
          RobertRyan

          @bd2
          Cadillac and Lincoln are luxury models in the US but struggle against the Germans AND Japanese
          The Germans are providing a Global “Luxury” image that impresses people in NA and Japan.

          • 0 avatar
            bd2

            Which is why including the luxury German makes (as well as the imported Japanese models) as “proof” of how open the Japanese auto market is to imports by BS is a bit misleading.

            The only import brand that has more than token sales in Japan is VW and even they only have a 1.2% marketshare – way lower than what Ford has in just about every overseas market aside from Japan.

          • 0 avatar
            RobertRyan

            @bd2
            “Which is why including the luxury German makes (as well as the imported Japanese models) as “proof” of how open the Japanese auto market is to imports by BS is a bit misleading.”
            Why would that be? If they do not want to buy VW is someone going to force them?
            In the US they do not buy VW / Audi /BMW Station Wagons, elsewhere they do. is someone going to force US consumers to get with the program and buy some?

    • 0 avatar
      wmba

      Between Dr Olds and his brand of logic wherein the US industry is being assailed from all sides including people not seeing that the GM bankruptcy was just a big misunderstanding, and Big Al from Oz and his never-ending plea for the universal adoption of UNECE regulations, apparently handed down from on high, I find myself even more uninformed on the true factors at play here.

      Car and Driver August issue shows how much safer US crash regs are compared to UNECE crap. I’ve said it over and over again: let the steel-rimmed bespectacled bureaucrats at the UN and EU get a real life and adopt the US crash regulations instead of theirs. They don’t even have rollover standards for roof strength, for a start.

      Why do you continually evangelize for a worse standard, Big Al? What exactly is the bee in your bonnet? You make no sense to me at all. It is certainly not a truism that any old standard is better than none. My engineering career taught me that, and as Brunel said, it fosters the end of imagining better.

      Dr Olds, on the other hand promulgates any statement made by a self-serving Ford or GM executive as self-evident truth. Be a good man and go over to Japan and persuade the populace that their life is incomplete without a King Ranch F150 parked in the narrow street outside. I’m sure you will be viewed as the man from Mars for your earnest troubles because not one Japanese is interested, and US industry besides Chrysler hasn’t got off its saggy butt in decades trying to sell US models outside North America. They just complain when furriners don’t order them off Ebay sight unseen with zero sales effort expended, as though they are entitled to sales, just because. Their argums no deper than that and is utter rubbish.

      Yup, we have a man from Australia who thinks he knows what Americans should buy (mid-sized pickups built to UNECE standards), and an American who thinks he knows what the Japanese should buy if they didn’t erect tariff barriers – why everyone wants the American way of life!

      I give both both points-of-view zero credence, as they, IMO, (YMMV) lack as they do any self-doubt or even the mildest acknowledgment of other’s opinions. Time and again. Surely the wall is getting hard on the pate in both cases from the constant banging, and concussion has set in.

      • 0 avatar
        RobertRyan

        @WMBA,
        No Big Al From Ox said IF you were to ALLOW Global Pickups in then they would have an impact. People in the US/Canada still like their Full Size”SUV’s with a bed” No there will be no total surrender, just some impact.
        UNECE standards, yes good idea, the US standards are atrocious
        http://www.leasetips.com/images/F1501.jpg

        • 0 avatar
          Scoutdude

          No one is keeping the global midsize trucks out of the US except for the people who manufacture them. The chicken tax doesn’t make a bit of difference, or we wouldn’t have the Transit Connect or Sprinter.

          The “global” Ranger was going to be built and sold in the US as the F100. An emissions compliant power train, a few detail changes, a US built and installed bed (or some other chicken tax dodge) is all that it would take for Ford to bring it here now. However one look at what happened to the market for new compact trucks and you’ll see why the dropped those plans.

          In 2002 Ford sold over 225,000 Rangers. It had dropped to less than 1/4 that when they decided to pull the plug on it and the F100. The Tacoma Peaked at 170K in 2006 and dropped steadily to 106K in 2010, until getting a boost from the discontinuation of its competitors. The Colorado and Canyon also had steady drops in sales from their peak in 2002.

          The Dakota the only real mid size sold in the US peaked at 177K in 2000 and dropped to less than 10% of that before Chrysler pulled the plug.

          If truck buyers really wanted a more economical truck sales would not have kept sliding as gas prices kept creeping up.

          The reality is that the market isn’t big enough for more than a couple of players. The Tacoma and Frontier stick around since they are their companies best selling trucks and the want to keep saying that they are “full line” manufacturers.

          • 0 avatar
            Big Al from Oz

            @Scotdud
            There you are again misinformation.

            Is that the standard issue UAW response?

            To lie and misinform. If that doesn’t work you will try and disrupt.

            I bet if gasoline increased 25% you would be the first to cry foul.

          • 0 avatar
            Scoutdude

            No misinformation Big Al go to goodcarbadcar and you can look up the sales figures for all the compact and full size trucks in the US since 02. You’ll have to trust Wikipedia for the Dakota numbers since for some reason GCBC doesn’t have figures for it. If you want to see how the F150/Silverado/Ram stack up in MPG vs the compacts you can go to fuel economy. gov and you’ll see how they get as good or better MPG as the Tacoma and Frontier we get.

            As I’ve told you many times the chicken tax is just something to cry foul about, if the mfg really wants to sell trucks here that were built elsewhere there are loopholes. Those loopholes large enough to drive a truck through have been working just fine for decades and there is no sign of them being closed anytime soon.

            You like to say how the Tacoma you get is so much better than the one built in the US and if that is the case why doesn’t Toyota make it and sell it here too? The MFG’s know the American truck market much better than you ever could and they have decided that those trucks you get just wouldn’t be profitable in the US.

            Personally I would love it if a truly capable truck came to the US that was smaller. I keep holding on to my ancient F350 since I like to be able to put stuff in the bed w/o having to lift it chest high and I would love a little better MPG but I still need a truck that can haul 2 US tons or tow at least 10K for what I use my truck for. I’d also love it if more diesels were sold as that would make even more “waste” gasoline and lower its price for use in my vehicles.

          • 0 avatar
            Big Al from Oz

            @scotdude
            Then, a simple yes or no will suffice;

            1. The US should align to UNECE vehicle harmonisation ie safety, design, EuroVI

            2. CAFE should be abolished and the EuroVI system used in lieu.

            3. You agree that the chicken tax should be removed.

            I just need a yes/no reponse.

      • 0 avatar
        doctor olds

        @WMBA- Is your reading comprehension that poor? I listed a few empirical facts and suggested Mullaly might have a better basis to understand the issues than anyone sitting on the sidelines, chattering away. I am really curious as to what you find fault with in my comments.
        I wrote nothing about King Ranch trucks, GM, or any specific competitor.

        As a matter of record, I was involved with the Toyota Cavalier program, the first, and I think, still the only US make to receive approval from the Japanese government to be shipped directly from a US plant to Japanese dealers without “re-inspection” typically required of other imports. My real world experience is dated, and not particularly deep wrt difficulty in exporting to Japan, but it leads me to believe Mr. Mullaly over Herr Schmidt as an expert on the business realities.

  • avatar
    BrianL

    How are imports strong when they are such a small part of the market, and a good portion of the imported cars are from domestic brands.

    What is the percentage of imports to total sales in Japan?

    Take away the domestic brands, what are the imports now?

    Japanese imports are pretty much a joke right now.

    • 0 avatar
      Big Al from Oz

      Brian L
      The Japanese (and others, notably Germans) vehicle manufacturers concentrated on developing a global market since the 70s.

      What has the US done in that period? Protect itself from the global market. Now the world is becoming global and what vehicle does the US manufacture that is global? Not much, a few collector vehicles, ie, Mustang, Corvette, Viper.

      The UAW and Detroit have shot themselves in the foot and now want others to protect them further.

      The US market only really has pickups that are indigenous volume vehicles. Who wants them? Read the article on the chicken tax prior to this one, they are inter-related.

      While the Japanese and Germans were catering to the global markets for the last 40 years Detroit (GM, Ford not Chrysler) had cosy regional divisions around the globe building to a changing market ie, Opel, GMH, Ford UK, Australia etc.

      The global divisions of GM and Ford now supply the US with most of the design for your cars. Detroit screwed up.

      Detroit has left itself open.

      • 0 avatar
        BrianL

        Did you see me say Detroit in there? VW is the only non domestic that does much of anything, and it still is a very very small percentage of the market. The only depicted here is imports. Imported cars in Japan make a very very small part of the Japanese market.

        You mention how the Germans have been looking at producing for a global market, and I don’t deny this. But, even they have a very minuscule share in Japan.

      • 0 avatar
        billfrombuckhead

        One has to ask why a foriegner would hate the UAW so much and not mention Germany’s very strong unions or South Korea’s very militant unions. A lot of people hate the UAW for bailing Martin Luther King out of Birmingham jail and being such a bedrock of the civil rights movement.

        Is efficiency the new fascism? To me that’s what this globalization is all about.

        • 0 avatar
          Big Al from Oz

          @billfrombuckhead
          First things first, I’m not the one from a different country:) Also I was born and educated in the US. I also hold a US Passport.

          What I dislike about the UAW is the constant fear they try and instill into the general population in the US with half truths and lies and the significance of their position.

          They are to powerful, the decisions they make are not in the interest of the US.

          They are only interested in themselves, not even the rank and file. Members pay dues and what do they get for it?

          Have a look at the number UAW members now and in the past and you tell me you have done the rank and file a great service.

          Look at the city of Detroit, Motor City, you guys are also partly responsible for it demise.

          But like any unionist you will not accept accountability for the unions actions.

          When Chrysler and GM required bailout money why didn’t the UAW come in first with cash, why didn’t all the unions across the US and Canada cough up cash for the strickened auto industry?

          Because you were to busy trying to use other peoples’ money to save your asses.

          Those people are normal Americans some who earn less than you guys and pay taxes so you can keep on screwing up the US auto manufacturing sector.

          Do you really care about America and the future of the US auto manufacturers. If you do then let the US compete fairly without barriers and tariffs to artificially protect your jobs. This can only go on for so long, then another bailout or be bought up by the Italians, whoops that’s already occurred, the Germans, Chinese or Japanese or even an Australian.

  • avatar
    Summicron

    Would any Japanese person who is reading this kindly give us your opinion?

    これを読んでいる任意の日本人は私達にあなたの意見を記入してくださいだろうか.

    • 0 avatar
      ccode81

      Hi Summicron, thanks for the invitation.

      To be honest, I’m getting bored about the comments always same and pointless, ignoring my previous objections.

      Foreign makers building cars in Japan – do simple math of buying land, building factories, send expats and family to super costly nation, headhunting English speaking middle managers etc. together with general operation cost. and all this for just to sell cars in shrinking market? you’ll get sued from short eyesight shareholders.
      If GM wants Kei market, simple : buy back Suzuki. much better spending than put cash into PSA.

      Koreans – already mentioned in last series, it is not quality issue. more the love-hate game.

      Currency – their point might work if criticizing the exports from Japan to be aggressively priced, but works very little for bringing cars to Japan. Importers have much more on administration cost issue than the cost of manufacturing to forced keeping the price high. Retail prices didn’t get low at all when last time Yen got into insane strong range.

      Back to school text to learn about international trade, Adam Smith says it happens when country exercise absolute advantage over one another.

      Japan sells cars and electronics to US. US sells air crafts, military weapons, agricultural product and US Treasury bonds to us. can’t we make simple as that?

      • 0 avatar
        Summicron

        Awesome, ccode81, thanks for your reply.

        This debate is truly ridiculous. Your past comments have very clearly explained, from the best possible authority, why American and Korean vehicles are not popular in Japan.

        When Americans encounter the same obstinate refusal to listen to reason that your comments have received here, our kimarimonku for that is “talking to a box of rocks”.

        Cheers!

        • 0 avatar
          bd2

          Don’t buy the love/hate rationale for the poor showing by Hyundai and Kia.

          Samsung Galaxy phones sell well in Japan and K-pop is big (as well as Korean dramas) and if anything, it would be the Koreans who would have the antipathy since they were the ones who suffered under the brutal Japanese occupation.

          And yet, sales of Japanese autos are growing again in Korea now that the valuation of the yen has decreased.

          It says something when VW, Hyundai, Kia and Ford do really well and/or seen immense growth in all the other major auto markets, but the one where they ALL struggle is in the Japanese market.

          • 0 avatar
            ccode81

            What is that ‘something’? please inform me precisely.

            As a Japanese consumer who can go to any dealer to buy anything under my budget with totally free discretion, let me remind you one thing.

            The static numbers you are seeing above is a total sum of purchase decision made by numerous consumers who all has freedom of selection.
            No one force to buy any specific makes / model.
            Automobiles are not a ration from government at least in this island.

      • 0 avatar
        RobertRyan

        Thanks Ccode81 very good reply. Succinct and to the point.

  • avatar
    Tomifobia

    “Japan’s borders are even open for a handful of Hummers, Pontiacs, and the odd Saturn.”

    So, do these figures include used vehicles, or is it just new ones that have been sitting around to moulder for the past several years?

    • 0 avatar
      Big Al from Oz

      @Tomifobia
      In Japan, like Australia and Europe you get a grey import from the US in your country.

      But the US market is that protected you can’t grey import into the US.

      This is what amazes me about many of our American brothers, they don’t realise how closed and protected their vehicle market is.

      I do think the US not Japan has to review its stance regarding the global vehicle market.

      • 0 avatar
        Power6

        I think we know about the lack of grey imports here. Only way in is the front door in the US for the most part. It would be cool if there was more leeway there.

        I don’t think that for a market the size of the US you can consider that “closed” we have standards and they must be met to sell a new car here, no exceptions for low volume. Now FMVSS vs UNECE you could make a case is the US being a bit closed…

  • avatar
    Power6

    You’ve made your point Bertel and then went too far. You know full well that the Japanese market is a tough go for foreign brands.

    The only point you’ve made is that there are no formal barriers specifically to auto trade, whereas we do have the chicken tax in the US which is very specific.

    Are you going to repeat that every month or try finding some new insight? Are you a journalist or just a lazy old man pushing your opinions around?

  • avatar
    NHLM

    Currency manipulation?
    Wikipedia:
    1) The Plaza Accord (1985)
    2) The Louvre Accord (1987)
    for explicit and concerted devaluations of the dollar.

    During the 80s, the yen traded at between 200 and 275 to the dollar (down, of course, from 360 in the 70s).
    People are complaining about the change from 75 to 100? Really?

  • avatar
    Mc

    What is a Non-Tariff Trade Barrier?

    (Wiki)
    “Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the usual form of a tariff.”
    -&-
    “Standards take a special place among non-tariff barriers. Countries usually impose standards on classification, labeling and testing of products in order to be able to sell domestic products, but also to block sales of products of foreign manufacture. These standards are sometimes entered under the pretext of protecting the safety and health of local populations.”

    -So-

    Kei Car Standard: ” A Japanese category of small vehicles, including passenger cars, vans, and pickup trucks. They are designed to comply with Japanese government tax and insurance regulations, and in most rural areas are exempted from the requirement to certify that adequate parking is available for the vehicle.[1][2][3] This especially advantaged class of cars was developed to promote popular motorization in the post-war era. While successful in Japan, the genre is generally too specialized and too small to be profitable in export markets.”

    http://en.m.wikipedia.org/wiki/Non-tariff_barriers_to_trade
    http://en.m.wikipedia.org/wiki/Kei_car

    • 0 avatar
      Mc

      –Kei is by definition a Non-Tariff barrier–

      So, any discussion about Japan’s auto market must be focused on Non-Tariff barriers.

      My question, why can’t all the other small cars from across the world that get good gas mileage (like the Japanese Kei cars) get the same tax, parking and insurance benefits as Kei cars get? An imported car being a millimeter off in size …. or having a full 1 liter sized engine is the reason a good small fuel efficient that is easy to park from a foreign land can’t participate fully in the 40% of the Japanese market that is designated Kei?????

      –Kei is by definition a Non-Tariff barrier–

      • 0 avatar
        juicy sushi

        Why? It is not a barrier to the non-Kei market. Most Japanese cars are still not Kei cars. Why aren’t imports more competitive in that market?

        • 0 avatar
          Mc

          –The “Kei” car class is certified, 100% Grade A Japanese Government Double Talk for Non-Tariff Trade Barrier– ;0)

          Juicy,

          Didn’t quite catch you…. Explain again what specifically is the reason why all small fuel efficient cars from all over the world that are easy park can’t be sold “right now today” as “Kei” cars (getting all the same tax, parking and insurance benefits)?

          If a foreign car is easy to park and gets great gas mileage why does it get excluded by the Japanese Government from the 40% of the Japanese car market that Japanese regulators call “Kei”???????

          Basically, blocking an imported car that is a few millimeters off in size or that has a 1 liter engine instead of a .6 liter engine from being certified by Japan’s Government from selling as a “Kei” car is 100% Grade A Government double talk for “Non-Tariff Trade Barrier”.

          • 0 avatar
            th009

            It’s the same as every regulation in every country in the world. If you fail to meet the regulation by 1 mm, you will not be accepted, regardless of whether your product is “better” in every other way.

            US has CAFE regulations, Europe has CO2 regulations, it doesn’t matter whether you have better products, you still need to comply with those.

          • 0 avatar
            Mc

            Th009,

            Reducing fuel consumption or CO2 should alao in Japan a simple standard like “MPG” or “CO2″ requirements. Slight Engine size and size vehicle differences are irrelevant to (have nothing to do with!) MPG, parking, CO2 production, etc. so …. making Kei a Non-Tariff Barrior by definition.

            Essentially the sales numbers presented here are divided into the unprotected part of the Japanese market (60% of sales), and the government protected “Kei” segment (40%).

            It’s humorous (to me at least) to read about the “free market” for cars in Japan… then in the next sentence to see the “Kei” breakout in the sales figure…. The existence of the government maintained Kei segment is the protected part of the Japanese market ( by definition). The world is full of quality small, fuel efficient, park-able cars that should automatically be given “Kei” (with all the tax, parking benefits) if the Kei market is to be a free trade market segment.

          • 0 avatar
            juicy sushi

            No, Kei cars are a particular class of vehicle which has specific technical requirements. CAFE rules are the same. Why are there so many cross-overs and few wagons? Cross-overs fit the definition of a light-truck and so reduce CAFE costs for manufacturers. Kei cars similarly offer tax breaks to consumers and so Japanese companies build cars to fit the rules. It’s a waste of money for everyone else to do so for 40% of the Japanese market. For some Japanese companies it’s the only thing keeping them alive as they’re uncompetitive in full-size cars. Much like the Detroit 3 and full-size trucks.

  • avatar
    Mc

    To Bertel Schmitt,

    We both like free trade. What if Japan gave up its “Kei” regulations* and the US gave up it “Chicken Tax”** rules.

    That would be a fair exchange, right?

    –Until these two barriers to trade are dropped, I think is is important to treat both of these trade barriers (Kei, Chicken) as serious issues…. both important, both a big problem & both should be stopped!!–

    *Meaning Japan would have to allow only high gas prices, small roads, crowded roads and a shortage of parking to keep Japanese from buying big cars.

    **Meaning the US would drop its import duty on trucks.

    • 0 avatar
      Power6

      The kei car is not the same as chicken tax. One is a tax targeted at only imported product the other is a level playing field for all product.

      • 0 avatar
        Mc

        Agreed Power6,
        Re:
        “The kei car is not the same as chicken tax. One is a tax targeted at only imported product the other…”

        The “Chicken” is a Tariff Barrier. Kei is a Non-Tariff barrier (specifically classified as “Standards” non-Tariff Barrier).

        If I were a government official charged with blocking foreign imports from 40% of my market… I would choose the more highly effective non-tariff barrier (over a tariff) as my tool of choice (specifically “Standards”) in order to lock out the competition. “Standards” allows you to do annual updates (to frustrate/stop small volume new entrances from amatorizing any and all investments) and to create mountains of vaguely “reasonable” standards that do squat towards anything that is beneficial to customers or society in general.

        • 0 avatar
          RobertRyan

          @Mc,
          The Kei is no “Chicken Tax’ as it only applies to relevantly small proportion of vehicles sold in Japan.
          US Industry is not concerned in producing vehicles for a very low profit source. May as well through in Chinese Minvans, Filipino Tuk Tuks and 3 wheel Vans sold in Italy.

          • 0 avatar
            Mc

            @RobertRyan

            The article above says the “Kei” (600 liter cars) is 40% of the Japanese market…. (End of the article). If I understand that right… that’s not a “small” part of the Japanese car market, it’s a “Huge Hunk.” Please re-read that last part of the article—- see if I misread it…. I don’t think I did….

  • avatar
    niky

    The Kei is not a non-tariff barrier. It applies equally to all cars. Anything that applies equally to all cars is not a barrier.

    The Kei rule is instead a market-distortion which benefits local manufacturers because it gives them a class of vehicle to build that won’t be sellable anywhere else. India loves small Kei-like cars, but modern Kei-cars would be too expensive to sell in volume in India, and the engine capacity is too small. In Europe and America, there are likely standards they won’t be able to meet without further engineering (and thus, an even higher price).

    But this market distortion is no different than US CAFE regulations, which makes it a bastion of large-footprint SUVs, as CAFE gives bonuses and exemptions for trucks. The larger, the lower the CAFE targets you have to meet.

    It’s no different from Asian AUV (Asian Utility vehicles) regulations, which, in the past, gave tax exemptions and preferential rates for 10-seat five-door compact pick-up based diesel vans.

    And this is no different from European Quadricycle regulations, European/Asian (lots of countries do this) displacement-based taxation or India’s special tax exemption for ultra-compact sedans (which has led to that ugly little Swift sedan).

    To single out the Kei car rule as an insurmountable non-tariff barrier unique to Japan, wherever you come from, is the height of hypocrisy.

    Also… standards… if most of the globe follows one standard and you follow another… who’s the one who’s not playing ball? Japan may have its own standards, but the US is hardly one to be criticizing that behaviour. Everyone else is falling in line behind European NCAP standards, which are uniform between Europe, Asia, China and Australia.

    • 0 avatar
      Mc

      @niky

      Is the Japanese government created “Kei” legal status a Non-Tariff barrier?

      ———————-
      Non-tariff barriers-
      Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the usual form of a tariff.

      One key type of Non-tariff barriers:

      Standards-
      Standards take a special place among non-tariff barriers. Countries usually impose standards on classification, labeling and testing of products in order to be able to sell domestic products, but also to block sales of products of foreign manufacture. These standards are sometimes entered under the pretext of protecting the safety and health of local populations.
      http://en.m.wikipedia.org/wiki/Non-tariff_barriers_to_trade
      —————–

      So, niky….. why can’t all easy to park, fuel efficient small cars get the Kei tax status?

      “Kei” is not about meeting Japanese consumer or societal goals, it is a restriction that blocks foreign cars that already (today) meet the alleged goals of the “Kei” designation.

      “Chicken” applies to 50% of the US market…. “Kei” affects 40% of Japan’s market.

      We are all for free trade here, lets abandon Chicken and Kei. Set aside “Japan bad or good” and “Detroit bad or good” and lets instead use our energies to end trade barriers like “Kei”, like “Chicken.” They are all bad. Let KO them, no excuses!

      • 0 avatar
        niky

        Kei classification is not a “standards” barrier. It does not ban the sale of any non-Kei car.

        Read my previous post again. Kei regulations are simply market distortion. Just like CAFE.

        Both have the same effect. CAFE creates a bigger market for big trucks. Kei regulations create a bigger market for tiny cars.

        Both sets of vehicles are difficult to impossible to sell outside their home markets, and in the end, are a non-issue. If a foreigner wants to sell Keis or full-sized US trucks, they can. But such Keis are a hard sell elswhere, where even the poorest countries, like India, prefer 800cc – 1000cc super-minis that are much larger than Keis, and prefer “mid-sized” pick-ups that are much smaller than American Full-sized trucks.

        It just doesn’t make any sense, at the moment, for anyone who hasn’t got manufacturing capacity in either country, to attack that market, because they can’t amortize costs by selling the resultant cars outside them.

        So you have to rely on the internal market.

        The big difference is: If you build big trucks in America, you can make gigantic profit margins. If you build tiny cars in Japan, to Japanese standards, then profit margin is razor thin.

        There is a good reason that in the heart of Kei-Land, manufacturers resort to tie-ups and badge-engineering.

        • 0 avatar
          Mc

          Niky,

          I agree with most of what you have been saying and I like what you have been writing.

          A non-tariff barrier (standards) is simply one type of market distortion. Essentially we both agree that it’s a “Bird”…. I am simply naming the type of bird it is “Non-Tariff Barrier (Standards).” We may not agree on that…. what specific type of market distortion would you call the “Kei” regulation?

          Re:”Kei classification is not a “standards” barrier. It does not ban the sale of any non-Kei car.”

          Kei regulations bans the inclusion of cars from around the world that already now meet the goals of “high gas mileage” and “easy to park” by attaching unrelated shifting standards that have little relation to the alleged purpose of the “Kei” restrictions.

          Import tariffs are the first stop for protectionist scoundrels …. and non-tariff barriers are the last desperate stop for those same protectionist scoundrels… so can we agree that both the “Chicken” and “Kei” schemes should just be KOed, for the sake of consumers wallets and free trade?

  • avatar

    Bertel, I have just one question about all this. Why does a Ford Focus start at 2,930,000 yen in Japan? That seems very expensive for a car that is ostensibly imported without any trade barriers. I don’t think you get to blame UAW drunkards, because I suspect that Focus was made in Thailand. So what’s the deal? What’s adding all that extra cost to a car that competes quite effectively with the Corolla everywhere else in the world? It couldn’t possibly be… trade barriers, could it?

    • 0 avatar
      Big Al from Oz

      @John Rosevar
      The 2.9 million yen isn’t that bad, it appears to be in the ball park of what we pay in Australia. Also I told another person the Focus is made in Sth Africa, production has moved to Thailand in the end of last year.

      In Australia on those figures at the time of the currency rates it would translate into approx. 2.7 million yen. I would think the Japanese Focus is from Thailand as well.

      FORD FOCUS TREND HATCH
      Price: from $26,790
      Warranty: 3 years/100,000 km
      Resale: 58%
      Service: 15,000km/12mths
      Thirst: 6.6L/100km, 95RON; CO2 154 g/km
      Crash rating: ANCAP safety rating 5 stars
      Safety equipment: 10 airbags, ABS, EBD, EBA, traction and stability control
      Engine: 2.0-litre 4-cyl 125kW/202Nm
      Transmission: 6-speed sports auto, FWD
      Body: 5-door hatch, 5 seats
      Dimensions (mm): 4358 (l), 1823mm (w), 1484 (h), 2648 (wb)
      Tracks: front/rear 1554mm/1544mm
      Weight: 1376kg
      Tyres: 215/55×16
      Spare: space saver

    • 0 avatar
      th009

      An interesting question. Ford is importing only the Focus Sport, at just under 3M yen. The new Golf starts at 2.5M yen, but VW is only bringing in the BlueMotion (high efficiency) models for now, priced between 2.5M and 2.9M yen. My guess is that Ford is trying to position the Focus as the sporty option in the import segment.

      In comparison, Golf BlueMotion 1.2 TSI Trendline with DSG is priced at about 20K EUR in Germany, not so far off Japanese pricing. I did not check on equipment levels. (Ford does not offer a “Sport” model or a 2.0 DOHC engine in Europe so could not do a comparison on that.)

    • 0 avatar
      ccode81

      This is what I’m saying administration cost above, if you goto Ford Japan web site, it says they have 160 staff.
      You need a lot of sections, distribution, marketing, planning, PR, IT, legal, etc with several head counts to each desks.
      Say hire cost per head count is JPY 10million per year including benefits, pensions, office rent,education and so on, that is 1.6 billion yen.
      Plus you need to keep advertise the product on media, treat motor journalists by inviting them to oversea press show, pay incentives to dealers.
      Selling only 4-5,000 cars annually and bring it to break even, cost you have to put on each car is about 500 k
      To make the business profitable, it requires to lose money on these costs for decades and slowly gain reputation and volume. MBA classes might not teach this kind of model.

      • 0 avatar
        dtremit

        So skip Ford — look at VW, Bertel’s “success” story.

        They’re selling 100k+ cars a year in Japan, so they should be able to spread out the local costs.

        So why is Japan the only market in the world where a GTI sells for 25% more than a MazdaSpeed 3?

        • 0 avatar
          juicy sushi

          A Mazdaspeed 3 can be a lot cheaper when you only need to transport one a couple of hundred km’s from Hiroshima, rather than a couple thousand. Also, VW hasn’t gone downmarket to chase volume like in the US.

          • 0 avatar
            dtremit

            The Speed 3 is built a lot closer to Australia than the GTI is, and it’s not cheaper there.

            The Speed 3 isn’t more expensive in Germany, where the GTI is local.

            And neither is positioned as a downmarket car in any market. I can’t find a single major market other than Japan where they don’t sell for roughly the same price. Nor should they — they’re direct competitors.

        • 0 avatar
          th009

          And as I posted above, VW’s pricing in Japan is very similar to Europe. They are not chasing unprofitable volume, they’re looking to make money on each car. And they are still gradually growing market share.

  • avatar
    Russycle

    “And that for the other half, “the vast majority are German luxury autos.” Bunk.”

    I think Bertel’s being a bit disingenuous in his criticism of BD2. BMW, Daimler, and Audi sold over 54,000 cars, vs. under 33,000 for VW, and some of those VWs probably qualify as luxury cars. So even if the Up! and Polo are the best selling Germans, it does appear that the great majority of German cars sold in Japan are luxury cars.

    This doesn’t prove anything about trade barriers, of course. But since Detroit is having a heck of a time competing with the German premiums at home, chasing them for a tiny slice of the Japanese pie seems rather silly.

  • avatar
    nvdw

    The EU is a free market for US vehicles as much as Japan is. Yet in the first five months of this year, General Motors sold 92 vehicles in the EU that apply to the moniker GM (US), including the Camaro and Corvette as well as Cadillac’s offerings. It’s down from 163 actually, with a market share of absolutely zero. By those numbers, the euro must be manipulated and the EU must be a closed market. Just like Bertel points out, as it is in Japan, you can get a vehicle type approval through a much simpler and less costly process if you plan to sell it in small enough numbers. Cadillacs shipped to both EU and Japan are brought in using that ‘loophole’. Ever tried getting a new Morgan 4/4 imported in the US? Even the factory gave up doing so.

    Is it tiring to see Bertel peruse his pet peeve again and again? Not if the GM’s and Fords of this world keep on whining about closed markets. If the Japanese don’t want your cars doesn’t mean their market is closed. End of story.

    However Bertel, the import chart as it seems is cluttered with imports of older vehicles, considering Rover ceased to exist years ago. Apparently, some Japanese car nuts seem to have imported some classic Autobianchi A112’s or some such.

    • 0 avatar
      DenverMike

      Nope. The EU imposes a 10% tariff on import cars and 22.5% on trucks. Zero loopholes.

    • 0 avatar
      doctor olds

      @NVDW- Your perspective ignores the fact that GM and Ford have long tended to build where they sell. GM has been the top seller in the UK (Vauxhall) and 2nd in Germany (Opel).

      In fact, GM’s Opel/Vauxhall is the second best selling brand in the European Union.

      I suppose you wouldn’t know that if use this site as your source of knowledge.

      • 0 avatar
        nvdw

        I live in a EU country, Dr Olds, thank you.

        And thank you, DenverMike, you actually made my point as well as Bertel’s. Why not complain about the EU being a closed market? It is apparently more closed than Japan. Currency manipulation is also rampant in the EU, as it is in Japan and the United States, amongst others.

        • 0 avatar
          doctor olds

          “I live in a EU country, Dr Olds, thank you.” Then why did you choose to ignore the empirical fact: GM and Ford hold over 16% of the EU market? The Japanese and Koreans have another significant slice. Meanwhile, the biggest foreign seller in Japan barely manages 1%. This data suggests something. What do you think it means, if not a protected market, from the perspective you bring, apparently much more so than EU?

          • 0 avatar
            RobertRyan

            @doctor olds,
            Several years ago it was 13% combined. That percentage has declined rapidly since then.

          • 0 avatar
            niky

            Ford and GM build in Europe. Which is a non-monolithic amalgamation of states with wildly varying labor costs and capitalization requirements.

            That makes it easy.

            Japan is a single country with very expensive land, very expensive labor and a huge local manufacturing capacity. Opening a factory in Japan is like planting a tree in a Redwood forest and expecting it to get enough sunlight to grow…

            That’s not to say that Ford and GM didn’t build there. Oh no… they simply bought into and partnered with the local manufacturers, instead, buying up stakes and doing business with Mazda, Subaru, Isuzu and Suzuki.

            And look how that turned out for Isuzu and Suzuki…

          • 0 avatar
            doctor olds

            For the first half of 2013, GM has 8% and Ford has 7.5% of EU sales, 15.5% total for the Americans, excluding Chrysler. Their total share is down from 16.3% in the first half of 2012.

        • 0 avatar
          bd2

          While the EU imposes a 10% import tariff, automakers like Ford, Hyundai and Kia all do well in the European market (since the import tariff doesn’t really apply since they build most of what they sell in Europe).

          • 0 avatar
            RobertRyan

            @bd2
            Ford, Vauxhall and Chevrolet are struggling.

          • 0 avatar
            bd2

            @RR

            All the automakers (even VW) are suffering from over-capacity in Europe.

            But let’s look at the UK auto market which, unlike the continent, has been growing.

            YTD sales rankimg.

            1. Ford Fiesta
            2. Ford Focus
            3. Vauxhall Corsa
            4. Vauxhall Astra

            Ford is the no.1 brand in the UK, followed by Vauxhall (VW is 3rd) w/ Ford having quite the lead over VW (163k YTD vs. 101k).

            Ford and Opel also have significant marketshares in the German auto market and WAY higher than VW’s marketshare (as the leading import brand) in Japan.

          • 0 avatar
            RobertRyan

            @bd2
            It is far from rosy for Ford.Report done on the 8th july.
            http://www.insidermonkey.com/blog/two-big-challenges-facing-ford-motor-company-f-189643/

            ” Ford lost over $1.7 billion in Europe last year, and $462 million more in the first quarter of 2013. It has warned that it could lose $2 billion this year.”

            Coupled with Quality issues Ford has a long road to travel to get back to being “Ok”

          • 0 avatar
            bd2

            Again, all automakers are suffering from overcapacity in Europe, but Ford is by far the no.1 brand in the UK and Ford has a 7.3% marketshare in Germany for June.

            Compare that with the 1.2% marketshare for VW in Japan.

            Having excess production capacity and actual marketshare are 2 entirely different things.

          • 0 avatar
            RobertRyan

            @bd2,
            GM had a substantial market share in the US before it went bankrupt. Ford’s marketshare in Europe is not that great and it is bleeding red ink. I would fix the bleed before the infection spreads to the rest of the Corporate body
            Ford is bleeding red ink in Australia and elsewhere.
            it does not get better in Asia as well. The Chinese economy is starting to stall.
            http://www.ydr.com/business/ci_23634806/late-chinese-market-ford-aims-catch-up
            “But Ford can’t keep relying on Europe and North America, where it sells 73 percent of its vehicles. The company lost $1.75 billion in Europe last year as sales plummeted in a recessionary economy, and it expects to lose $2 billion there this year. Profits in Asia would have cushioned those losses, but Ford’s Asian operations lost $77 million because of the big investments in new plants and vehicles”


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