Imports To Japan Strong, Despite Claims By Detroit That The Market Is Closed
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:
- 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.
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.
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"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.
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.