Lies, Damn Lies, And The Closed Japanese Car Market

Bertel Schmitt
by Bertel Schmitt

The Japanese car market is anything but closed, Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association said yesterday. Vis-a-vis The Nikkei [sub], Shiga basically repeated what we had said all along, and he used the same line of reasoning that doesn’t seem to register with some blockheaded parties:

“Import duties are zero, and there are no regulations or procedures that block American cars. European vehicle imports are increasing.”

Shiga should know. He is COO of Nissan, which quietly turned into Japan’s largest car importer on a brand basis for the year, only to fall back to number 2 in October on strong imports of the Volkswagen Group. Shiga also asked the same question which I always use, usually without receiving an answer:

“I would like to know exactly what aspects of the Japanese market the U.S. side considers closed.”

The matter bubbled to the top again because the Japanese government is finally making baby steps towards joining the Trans Pacific Partnership free trade framework. Japanese carmakers had been pushing their reluctant government that way for a while in an attempt to offset the surging yen.

Opposition comes from a not unexpected corner: From U.S. automakers. Ford, which also opposed the watered-down free trade agreement with South Korea, wants Japan to stay out. Not being able to answer Shiga’s question of which part of the Japanese market is exactly closed, Ford reverts to a familiar line of reasoning. Ford said in a statement:

“Japan already ships more than 200 cars to the U.S. for every one car we send there.”

In other words: We can’t say which part of the Japanese market is closed, but a look at our pathetic numbers proves that it must be closed somewhere, somehow. It can’t possibly be our own fault. No way.

As the table, provided by the Japan Automobile Importers Association and based on actual registrations, shows, imports are alive and well in Japan. Actually, they are rising with a vengeance. In October, they were up 33.1 percent, and for the year, they are up 23.4 percent.

Newly Registered Imported Vehicles by Brand(Total Passenger Cars, Trucks and Buses) Imports Japan October 2011 January – October 20112011Share2010Growth2011Share2010GrowthVolkswagen Group5,45227.7%3,43558.7%59,11226.1%54,9817.5%VW3,86119.7%2,51253.7%41,15118.2%40,7041.1%Audi1,5688.0%90673.1%17,7827.9%14,11026.0%Bentley150.1%966.7%1000.0%110-9.1%Lamborghini80.0%714.3%770.0%5540.0%Bugatti00.0%1-100.0%20.0%20.0%Nissan3,50017.8%2,96817.9%45,46120.1%19,881128.7%BMW Group3,37117.2%2,78820.9%38,12916.8%35,1288.5%BMW2,21511.3%2,0408.6%26,22011.6%25,4553.0%BMW MINI1,1465.8%72558.1%11,7225.2%9,43924.2%BMW Alpina70.0%17-58.8%1210.1%176-31.3%Rolls Royce30.0%6-50.0%660.0%5813.8%Daimler1,8209.3%1,51020.5%27,46412.1%26,6253.2%Mercedes-Benz1,7719.0%1,49618.4%26,41611.7%25,7892.4%smart490.2%14250.0%1,0390.5%83424.6%Maybach00.0%090.0%2350.0%Toyota1,8319.3%1,02379.0%11,8625.2%7,99648.3%Fiat-Chrysler8674.4%73717.6%11,0914.9%9,62015.3%Fiat4572.3%227101.3%4,9362.2%4,6047.2%Jeep1450.7%154-5.8%2,5521.1%1,57661.9%Alfa Romeo670.3%141-52.5%1,6090.7%1,36617.8%Dodge940.5%6251.6%8770.4%69426.4%Chrysler490.2%59-16.9%4980.2%689-27.7%Maserati150.1%24-37.5%2150.1%241-10.8%Ferrari320.2%65-50.8%3260.1%397-17.9%Lancia80.0%560.0%780.0%5347.2%Volvo6563.3%49532.5%8,8283.9%6,14243.7%PSA Group6293.2%49826.3%7,4133.3%6,72810.2%Peugeot3641.9%33010.3%4,9332.2%4,9030.6%Citroen2651.3%16857.7%2,4801.1%1,82535.9%Suzuki1130.6%233-51.5%3,0081.3%3,750-19.8%Porsche2681.4%20729.5%2,8651.3%2,7175.4%Ford3821.9%164132.9%2,8031.2%2,45914.0%Renault2611.3%19136.6%2,5771.1%2,22715.7%General Motors2541.3%19927.6%2,4811.1%1,99024.7%Chevrolet1180.6%7263.9%9820.4%74831.3%Cadillac960.5%8414.3%1,1330.5%82936.7%Hummer270.1%31-12.9%2450.1%307-20.2%GMC90.0%90.0%930.0%7917.7%Buick10.0%090.0%580.0%Opel00.0%010.0%4-75.0%Saturn00.0%010.0%2-50.0%GMDAT10.0%050.0%50.0%Pontiac20.0%3-33.3%100.0%911.1%DAEWOO00.0%020.0%20.0%JLR Group1270.6%1178.5%1,6340.7%1,4889.8%Jaguar750.4%741.4%8520.4%882-3.4%Land Rover520.3%4320.9%7820.3%60629.0%Honda660.3%116-43.1%8660.4%8393.2%Lotus150.1%27-44.4%2310.1%253-8.7%Mitsubishi10.0%10-90.0%1020.0%158-35.4%Aston Martin90.0%15-40.0%1090.0%9910.1%Hyundai20.0%12-83.3%700.0%194-63.9%Saab60.0%1500.0%550.0%4231.0%Rover50.0%50.0%370.0%52-28.8%Morgan20.0%0150.0%1136.4%MG20.0%090.0%650.0%Detomaso00.0%030.0%1200.0%Unimog00.0%1-100.0%40.0%1300.0%Kia00.0%1-100.0%30.0%30.0%Autobianchi00.0%1-100.0%20.0%20.0%Mini00.0%1-100.0%10.0%3-66.7%Subaru00.0%000.0%1-100.0%Others80.0%11-27.3%600.0%567.1%Total19,647100.0%14,76633.1%226,295100.0%183,45323.4%

The argument that Japan ships more than 200 cars to U.S. for every car the U.S. sends to Japan only proves one thing: The klutziness of American carmakers when marketing their cars in Japan. Around 70 percent of the cars imported to Japan are from European carmakers, and you won’t hear a European carmaker complain about a closed Japanese market. Even Japanese carmakers out-import U.S. brands ten to one.

Sure, European cars fit the taste of the Japanese consumer better. However, a halfhearted attempt to import truly European Opel cars to Japan ended in disaster. Ford likewise seems to be disinterested in leveraging its strong European presence in Japan. Both have ample RHD models from their sizeable U.K. presence.

It’s much easier to say “those crafty Japanese must have closed their market somewhere, somehow” than simply to admit: ”We NSFWd up.”

In the meantime, American carmakers worried about another Japanese onslaught have Japan’s government as their biggest ally: It seems to be more interested in protecting aging Japanese rice farmers and big Japanese insurance companies from bad American influences than in helping its auto industry.

Free trade would be in the interest of the American farmer who is one of America’s most important exporters. Even if U.S. carmakers would receive an engraved invitation to Japan, it wouldn’t matter.

Bertel Schmitt
Bertel Schmitt

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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Dodgeowner Dodgeowner on Jan 30, 2012

    Editors Rather than sensor my statements, prove that my data is wrong? By the way, I may make your site famous. I take screen shots of when I post. I have already posted what you do in one US newspaper. Wait until a real reporter starts asking questions. Am I the only one who sees though the distortions and misrepresentations in this article? Distortion 1 The writer states 275,644 foreign cars were imported into Japan, only later is it revealed that 74,091 cars were imported by domestic car makers (Nissan, Toyota, Suzuki, Honda and Mitsubishi). The real number of imported cars is around 200,000 in a market of over 4,200,000 vehicles sold. Distortion 2 200,000/4,200,000 is 4.76% not anywhere near the stated 10.3%. Even if this were a valid number how it is that in 53 years, from 1966 to 2011 the percentage increase from 10% to 10.3%. The writer once mentions the exchange rate and the reduced supply of cars due to the Tsunami, but these are the main reasons Japanese purchased more foreign cars, not an open market as stated. Distortion 3 What the writer does not tell you is that the car market is tightly controlled to protect the domestic car makers from foreign competition. Of the 200,000 REAL imported cars, 155,299 were from VW-Audi, BMW and MB, premium cars sold at high prices and not compete against the cars of the masses. Note: The Koreans use the same tactic. The # 1 selling car in Korea, for 2011, was the MB E300 CDi at just over 7,000 cars sold. The BWM series 5’s sold over 12,000. These cars are not what the masses can afford and so are allowed into the country. Interestingly, Hyundai/Kia has increased market share in Europe, America, and South America, yet in 2011 in Japan, Hyundai sold 81 cars, Kia 3. The Japanese are not going to let the Koreans do to them what the Japanese did to the European or American car makers. As proof, in 2008, 1 Japanese Yen was equal to 8 Korean Won, today 1 Yen = 14.58 Won or in other words, if you purchased a $10,000 Korean car in Japan in 2008, in 2012 that same car would cost $5480. Yet in all of 2011, Korea sold a total of 84 cars in Japan. Mr. Schmitt It would be easier to build cars where you sell rather than import. VW & GM build in China, and Ford, GM and Fiat are making progress to build in Russia, and Ford is working hard at expanding production in India, yet not only do VW, GM, Ford, Fiat not build in Japan neither does Renault, Citroen, Peugeot, MB, Audi and BMW. Why? The answer is and what the writer does not have the honesty to tell you is that the auto parts business is more tightly controlled that the auto industry. A foreign manufacturer would have its parts supply disrupted or find it impossible to obtain parts due to domestic auto threatening termination of parts contracts with that parts maker. While a Japanese buyer may have a bias for a Japanese branded car, a light bulb is a light bulb, a wiper blade is a wiper blade. Why no foreign auto parts makers in Japan of any size? Mr. Schmitt, list the foreign parts makers in Japan and the % of the marker in Japan. If what I have written has made you question what you have been told, it might be because there is another side of the story you have never heard. Visit this site, you will be stunned. There you will learn that Korea audits the taxes of foreign car buyers, they got this tactic from the Japanese. Prove it for yourself.

  • 1drofog 1drofog on Nov 26, 2015

    This article should read, "Delusions, damn delusions and the truly Closed Japanese Car Market." Dodge Owner is 100% on target. Yeah, maybe they import cars from elsewhere but a lot of them have names like Nissan, Toyota, Honda... How Japan has Maintained The Most Protected Closed Auto Market In the Industrialized World 1. Japan, the third biggest car market on the planet, after China and the U.S., is additionally the industrialized world's most shut and protectionist market. x It positions 30th out of 30 of the OECD nations in measuring access for imported cars; x Total auto imports to Japan from the world measure just 3.9% of the business sector. In other words, Japanese automakers control 96% of their household auto market; x Although keeping up the most shut car market in the industrialized world, Japan has reliably sent out more than 40% of its auto and truck generation, trading about 60% (6 of each 10 autos and trucks fabricated) in 2008, with the greater part going to North America and Europe. x Since 2000, US fares to Japan 183,000 versus 16.3 million vehicles traded from Japan to the United States; x There are a great many autos and car parts sent out from Japan to the U.S. 70% ($52.1 billion of the aggregate ($72.7 billion) US-Japan car exchange deficiency in 2008. Conversely, US automakers have been constrained to trading just 183,000 autos and trucks to Japan from 2000 to 2008. The article may be out of date but it's still true that their market has not opened any more than it was back then. If anybody knows anything else then please, please tell me I'm wrong. x By anybody's judgment skills standard – whether a financial specialist, policymaker, advertising authority, purchaser or layman, this is not proof of an open business sector, but rather a fixed market. 2. Japan's Closed Market isn't characteristic or a mishap – it was made purposely, by government approach (MITI) now METI. x Following the conclusion and expulsion of US auto firms from Japan amid WWII, US firms were not permitted to come back to build up operations in its outcome. x Instead, Japan assigned the making of a noteworthy world class car industry its number one National Industrial Policy procedure and gave each advantage, impetus and assurance from rivalry that it could. x In the 1970s, Japan at long last opened its business sector to constrained import investment, and brought down its restrictive taxes and speculation limitations, however after it had made a huge and vigorous industry by controlling about 96% of its business sector. x Japanese automakers then set off on a noteworthy strategy of fare development, and secured a firm and quickly developing a dependable balance in the open U.S. business sector. Imports from Japan now speak to more than 15% (2008) of the US auto market. 3. At the point when Japan authoritatively "opened" its business sector, it idealized the specialty of utilizing non-duty boundaries as gigantic snags to every single outside company attempting to work together in Japan to keep imports to a base. x U.S. organizations or other remote "transplants" were not permitted to be inherent under Japan's strict venture laws; x Each individual imported auto was required to be conveyed to the Ministry of Transport for two days for examination before endorsement available to be purchased; x Japan's selective 'keiretsu 'courses of action in the middle of government and Japanese automakers averted US and other remote auto organizations from working together in Japan; x Japanese auto conveyance framework was stacked against shippers existing car merchants were illegal to offer remote cars or to join forces with outside automakers. x Japan has utilized car specialized regulations as a way to secure nearby markets by making too much troublesome and excessive administrative and accreditation necessities, with almost no security or outflows advantages; x The assessment framework in Japan was intended to advantage local over imported engine vehicle sorts; 4. In 1995 the US Threatened Tough Retaliation against Japan and Signed a Market Opening Agreement with the Japanese Government x All of these weights reached a critical stage in the mid 1990s, when the USTR, at the heading of President Clinton undermined to force 100% levies on Japan's extravagance automobiles, if the government did not consent to completely open its business sector to U.S. auto and vehicle parts. x This real understanding, called the l995 MOU, was seen as a noteworthy accomplishment at the time in securing Japanese consent to a free and open business sector. At the point when the 1995 MOU was marked, complete auto imports to Japan were 5%. Today, after 15 years, it is under 4%. 5. Will US automakers contend in Asia? For a long time, the Japanese government has contended that US automakers would not produce vehicles that meet their shopper's tastes or quality gauges. Yet, adjacent, in China, now the world's biggest auto showcase, the main automaker is a US organization, General Motors, which sold 1.3 million autos and trucks in 2009. 6.Currency Manipulation to pick up an upper hand x markets, acquiring gigantic measures of dollars and "jawboning" with a specific end goal to "push down" the estimation of its own money to give its fares a value advantage. 7. Why the issue of Japan's prohibition of US autos in its Cash for Clunkers project is critical. There are two vital reasons: x Principle: Japan has fixed its business sector to interestingly ensure advantages for its own cars. In particular for decades now. At the point when the US government made its "Cash for Clunkers" program last summer, it was precisely built to be transparent to all automakers, domestic and import. Half of the advantages went to Japanese auto organizations. Be that as it may, when Japan opened its own comparative system, it intentionally composed it to avoid US and most other imported automakers from taking an interest and profiting. This isn't right on a basic level, wrong in the soul of responsibilities made to the G7 to not erect new protectionist measures amid this monetary emergency, and wrong on any premise of reasonable play x Opening Japan's Market: The way that the endeavors of US auto and car parts suppliers over decades, and progressive Congress and Administrations have neglected to succeed in making Japan a really free and open auto advertise, that does not mean we ought to basically surrender. Japan's predominance of its home business sector gives it immense unreasonable focal points in the US and different markets where we contend. Leaving this circumstance unchallenged influences our own particular assembling aggressiveness here in the US, more emphatically than securing access to their car market. Toshiyuki Shiga is in denial or just blowing smoke but either way he is lying and he damn well knows it. So there!! As Ogden Nash once described the Japanese mind set back in 1937, "How courteous is the Japanese, he bows and says excuse me please. He climbs into his neighbor's garden and bows and says ,"I beg your pardon. He bows and grins a friendly grin and calls his hungry family in. He grins and bows and friendly bow and says, "So sorry this my garden now..." It may not be quoted directly since I did it from memory but this close enough is all that matters to make my point. :)

  • FreedMike Well, here's my roster of car purchases since 1981: Three VWsTwo Mazdas (one being a Mercury Tracer, full disclosure)One AudiOne FordOne BuickOne HondaOne Volvo I think I hear Lee Greenwood in the background... In all seriousness, I'd have bought more American cars had they made more of the kinds of cars I like (smaller, performance-oriented).
  • Kwik_Shift_Pro4X I'll gladly support the least "woke" and the most Japanese auto company out there.
  • Jmo2 I just got an email from the dealership where I bought my car and it looks like everything has $5k on the hood.
  • Lou_BC I suspect that since the global pandemic, dealerships have preferred to stay with the "if you want it, we will order it" business model. They just need some demo models on hand and some shiny bits to catch the impulse buyer. Profits are higher and risks lower this way.
  • Probert When I hear the word "patriot", I think of entitled hateful whining ignorant traitors to democracy. But hey , meant to say "Pass the salt."