Japanese Carmakers Consumed By Germany Envy
Despite the strong yen, Japanese auto exports rose 7.3 percent in January to 365,288 vehicles, that’s up for the 13th straight month, reports The Nikkei [sub]. Exports weren’t strong enough to out-balance the Japanese car market that contracted 21.5 percent in January. As a result, domestic production in Japan dropped 6.3 percent to 706,107 units in January. This is the fourth straight month of decline, the Japan Automobile Manufacturers Association reported today.
A lot of executives at Japanese carmakers wish they would be doitsu, or German.
Germany’s sales were up 16.5 percent in January. That was about time, because for the full year of 2010, sales had been down 23.4 percent. Germany experienced similar withdrawal symptoms from government handouts like Japan.
This, however, is where the similarities end. In 2010, Germany’s exports rose 23 percent. Despite a contracting home market, production expanded 11 percent in 2010 to 5.5 million. Germany successfully exported itself out of the crisis. This was helped by a low Euro. In more than one way, the troubles at the Euro’s periphery helped to prop up the German export machine faster than anybody expected.
This year, German car makers will produce 5.9 million units, expect the analysts at R. L. Polk. According to Automobilwoche [sub], Polk projects the home market (green line) to recover further, and exports (blue line) to power ahead. The result: Record 6 million units made in 2012. This number does not include German cars built outside of Germany.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
More by Bertel Schmitt
Comments
Join the conversation
The Euro has already gone up substantially. As Bertel pointed out, the Germans had the low Euro when they needed it. Now they don't. I wouldn't worry about excess auto capacity. It includes assembly lines now owned by "old" GM and "old" Chrysler, and those entities have no intention of restarting production. In fact, they're having a tough time liquidating the properties, with hazmat and remediation costs attached to them. Those lines are counted by their past production of '70s, '80s and '90s BOF, RWD fullsize cars nobody will buy today, and the sometimes-ancient factory designs are unsuitable for building smaller FWD cars. It's like the glut of underwater McMansions killing the housing market when there's actually a shortage of smaller, reasonably priced starter homes that would sell easily. Capacity figures need to be adjusted to exclude obsolete lines and properties unsuited to modern cars designs and production methods.
Please get that video off this thread, I beg you. Here's something more appropriate. http://www.youtube.com/watch?v=7I79m7_kAnA