By on September 2, 2014

Cadillac in Japan

Though General Motors is finding big success in China among its brands, the automaker is still a bit player in Japan, and not because of so-called nontariff hurdles.

Automotive News reports Yanase & Co. CEO Takeyoshi Ide proclaims internal apathy, not external policy, as the reasoning behind GM’s current status in Japan. As one example, Ide — whose Cadillac and Chevrolet dealerships number at 13, down from a peak 114 — says if the automaker would consider building more RHD vehicles suited for the Japanese market, especially Cadillacs, sales of 5,000 units annually would be “not so difficult.”

He has hope that a few moves affecting Cadillac, such as the hiring of former Infiniti chief Johan de Nysschen, would make the change “GM’s original people” from Detroit haven’t been able to undergo to bring success to the automaker’s premium brand. It’s also the reason why Ide hasn’t let go of his remaining GM dealerships despite also being the nation’s No. 1 Mercedes dealer, as well as one of its top sellers of Audi and BMW vehicles.

As for external issues affecting GM, Ide says policy is not among them — Japan imposes no tariffs on imported vehicles — and is just an excuse for the United States government to maintain its tariffs, including the infamous Chicken Tax.

That said, hope may be fading as it is. The sales forecast for 2014 remains flat at 1,200 units for GM’s efforts in Japan, higher than its nadir of 700 for all of 2009, yet lower than its zenith of 47,000 units in 1996. Additionally, while Mercedes moved 31,291 vehicles onto the streets of Tokyo through July 2014, Cadillac saw its sales fall 27 percent to 425 units compared to the same period in 2013.

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75 Comments on “Ide: Apathy, Not Policy, Is Behind GM’s Japanese Blues...”


  • avatar
    theupperonepercent

    If they (Japan) aren’t interested in the ATS or CTS, then might as well focus on China. Perhaps the Japanese aren’t wild for big blinged-out cars from America?

    • 0 avatar
      juicy sushi

      They’d quite like one over Benz in all likelihood, if it was available in RHD. Cadillac is LHD only, and that really crimps demand in RHD markets.

      • 0 avatar
        Manic

        Based on story and comments it seems that GM = Cadillac, maybe in Japan but not globally. If they don’t know other GM brands then why not put Caddy patches to something like Opel Adam, well, Vauxhall Adam as it’s RHD + maybe to the same Opels which are available in NA as Buicks. At least these would be RHD Vauxhalls in the UK.
        Based on quick search on a random Jap. car export site (20 hits with “Opel”). There’s been some gray? import before. If MB sells A-class compact and others sell small cars under premium brands then why not mini-Cadillac’s…not much to lose anyway.

        • 0 avatar
          RobertRyan

          Rebadging Opels as Cadillacs, failed as concept in Europe. I off hand cannot remember the donor brand but they were turned into “Cadillacs” in Europe and failed miserably

          • 0 avatar
            Manic

            Umm…I think you have something mixed up. Opels are made in Europe and no-one has sold these cars here in Europe as Cadillacs. What GM did was offer re-badged Opels as Cadillacs in America, the notorious POS Catera. Currently Buicks are based on Opels.

            Still, now quality is better and cute little car like Adam could def. find some buyers in cuteness obsessed Japan, IMHO. Same with Corsa, Agila, Astra, Insignia which are all available with RHD in the UK.

      • 0 avatar
        TangoR34

        I don’t think that’s a problem. Japan accepts LHD cars. A lot of Mercedes are out there without RHD configurations.

        • 0 avatar
          ccode81

          @Manic
          Opel pulled out from Japan around 2006. Zenith at 1996 47,000 units included 38,339 Opels according to Wikipedia.

          Yanase was importer of VW until 1993, but VW built own subsidiary to import cars, plan to leave Yanase as just one of distributor.
          Yanase got pissed off and switched to Opel’s impoter. It sold well for a while with their distribution power and so so nice offering, but around the discontinue of Omega, Opel got into their own malannaise era. Losing sales and repeating customers.
          also while Yanase sold Opel Zafira at hefty price, GM somehow allowed Subaru to sell the same car built in Thailand as Subaru Traviq with considerably lower price, showing how desperate GM’s management are.

        • 0 avatar
          juicy sushi

          That’s a niche consumer. Not the mainstream, who would prefer the convenience of the steering wheel on the correct side. It’s similar to the UK and the demand for US cars there.

          • 0 avatar
            RobertRyan

            Correct, LHD cars are now illegal in Australia whether a niche segment or otherwise. You can theoretically import a vehicle that is over 25yrs in LHD. Very few are left as LHD, only buyers of 65 Mustangs etc. they have to have a sign saying their LHD

        • 0 avatar
          RobertRyan

          Yes , still they have the same problem as in England, not easy to drive in a RHD country. So sell in limited numbers

      • 0 avatar
        CoreyDL

        Why don’t they just take some of the Cadillacs they (aren’t) selling in the UK and send them over to Japan? They already make RHD models for that market, so it makes no sense to me not to give them to the other major RHD country.

  • avatar
    petezeiss

    Who cares? What are they down to there, 40, 50 people?

    Never understood the flap over the Japanese market.

    • 0 avatar
      RobertRyan

      I think Cadillac is pretty well finished, struggling in the US and you cannot give them away outside North America

      • 0 avatar

        They’re struggling in the US in part because the mid-tier luxury market is favoring crossovers right now, while Cadillac’s latest models are all sedans. (SRX sales are up nicely in 2014, though.) But you’re wrong that they’re not selling anywhere outside of NA: Through July, Cadillac has sold almost 40k vehicles in China this year, up almost 70%. There’s a new factory under construction near Shanghai that will build RWD Cadillacs. They just launched a long-wheelbase version of the ATS that is generating some excitement. They’re far behind the Germans, but they’re targeting 10% of the Chinese luxury market by 2020, and they have a pretty good chance of getting there. The real challenge Cadillac has is that the improvements to the vehicles have outpaced the improvements to the brand image, and it’s just going to take time (and smart management) to change that.

        • 0 avatar
          RobertRyan

          Got to get more than 10% of the Chinese market to be viable. Still tiny numbers by any standard in China and they have virtually no prescience outside NA

        • 0 avatar
          spreadsheet monkey

          “The real challenge Cadillac has is that the improvements to the vehicles have outpaced the improvements to the brand image, and it’s just going to take time (and smart management) to change that.”

          Yes, that’s exactly the issue. The cars are good, but outside the US, buyers still associate Cadillac with Boss Hogg and Elvis.

    • 0 avatar
      spreadsheet monkey

      Japan has a population of 125 million and buys 5 million cars a year. Admittedly smaller than China, but still a market worth chasing.

      But yeah, who cares about these tiny little insignificant countries?

      • 0 avatar
        petezeiss

        “But yeah, who cares about these tiny little insignificant countries?”

        Eg-zackly!

        And it’s not like Japanese could even see out of the high-beltline bathtubs Cadillac would sell them, anyway.

      • 0 avatar
        ellomdian

        The problem isn’t the 5 mil that they are buying right now (and let’s be fair, Japan is as nationalistic when it comes to sensibilities as the US is) – it’s how many they are going to be buying 5 years from now. Japan has been on the brink of catastrophic economic collapse for a decade now, and the domestic issues they are already dealing with do not really make for a sunny forecast anytime soon. Rapidly aging/declining population, rank underemployment, and large off-shoring and globalizing efforts for the corporations that don’t realize huge tax breaks all point to a country you don’t want to go out of your way to serve anymore. Especially when the effort and cost you sink into doing so should have such a stronger return if pointed at Brazil or India.

        • 0 avatar
          sportyaccordy

          Not to mention their debts…..

          Japan is DOA. 5 years is generous… China has some more time, but not much more. Their age distribution is where Japan’s was 20 or so years ago, and they are saddled with some serious environmental issues that will weigh them down. They are also maturing as an economy, outsourcing to places like Somalia.

          Really, if GM wants to invest in sustained growth, they need to look at the US and emerging economies. East Asia is a dead end.

          • 0 avatar
            RobertRyan

            That one child policy is already affecting Chinese buying habits. Not as robust as it was and generally shrinking

          • 0 avatar
            Big Al from Oz

            @sportyaccordy
            The US isn’t doing as well in the Asian world with trade as it does with the EU.

            Part of the problem is the US is attempting to be a little more ‘dictatorial’ with the Pacific Rim nations.

            There are issues regarding the Asian trade that the US isn’t budging on, ie, Chicken Tax. The US is willing to deal the Chicken Tax out of an EU arrangement but not with the Asians.

            I do feel the reason is the midsize pickup market in the Oceania, South, SE and East Asian market would probably be as big as the US and Canada combined.

            So, Asia manufacturers massive numbers of them, cheaper than the US does.

            Beef and other agri-industrial products is another issue the US is having.

            The lack of a strong foothold in the Japanese market is a legacy of the Japanese 1951 vehicle classification system.

            If you look at the size of say the Japanese small car class you will see that a minitruck was built to the maximum dimensions of this category, ie, 15.4′ long, 5.6′ wide, 6.6′ high, with an engine capacity of 2 litres or less.

            The US, Australia, etc, used these vehicles with larger capacity engines.

            This Japanese system created the Japanese vehicle market, which didn’t quite fit in with the US or EU.

            It was a form of protection, similar in execution to the US’s stance regarding emissions, CAFE and other technical barriers that currently exist (not including the chicken tax).

            http://en.wikipedia.org/wiki/Vehicle_size_class

  • avatar
    Varezhka

    At least we know that there are still 425 older yakuzas unwilling to buy a Merc or a Century.

  • avatar
    Rday

    Just more proof that GMs laziness and UAW thinking is still alive and doing well at the Rencen. GM and Cadillac need to take a well deserved ‘dirt nap’.

  • avatar
    redliner

    Would you spend $50,000 on a right-hand drive Cadillac or a the same $50,000 on a left hand drive Merc/BMW/Lexus/Audi here in the United States? Essentially, that is the choice that Japanese consumers are being asked to take. Not a tough choice.

  • avatar
    Pig_Iron

    Wow, I like this Cameron’s writing as much as the other’s. In fact, they’re eerily similar. In any case, Mr Ide is correct, if the Japanese sold wrong hand drive cars here, no one would buy them.

  • avatar

    Not for nothing, but aren’t both Japan and continental Western Europe contracting markets? So – aside from pride – what’s the real return?

  • avatar
    Pch101

    VW is the dominant import brand in Japan, and its market share is about 1%. Even the most successful importer in the country can’t gain any meaningful traction there; RHD is the least of their problems.

    • 0 avatar
      bosozoku

      My anecdotal impression of things in Japan was that BMW, including Mini, was the most well-represented foreign brand on the streets. Regardless, they were still far and few between.

      • 0 avatar
        Pch101

        The top brands in 2013 were, in order: VW, Mercedes, BMW, Audi and MINI.

        Combined BMW and MINI new registrations slightly exceeded those of the VW brand alone, so your hunch was correct. But the top manufacturers were VAG, Daimler and BMW, in that order.

  • avatar
    Lou_BC

    “As for external issues affecting GM, Ide says policy is not among them — Japan imposes no tariffs on imported vehicles — and is just an excuse for the United States government to maintain its tariffs, including the infamous Chicken Tax.”

    This coming from the CEO of an American company in Japan.

    • 0 avatar
      Pch101

      I know that research isn’t one of your strong suits, but you do know that those Japanese pickups are no longer built in Japan, don’t you?

      • 0 avatar
        Lou_BC

        Pch101- cheap shot but that is all you got.

        What part of “it costs the same to build a small truck in American as it does a big truck” you don’t understand?

        We’ve already agreed that small trucks are price sensitive. It is hard to be price sensitive at the same build cost AND most truck companies will not loose 20K profits per truck to make 5K.

        Imports would open up the small truck market and how do we do facilitate imports?

        We open up trade……

        And how do we open up trade?

        FTA’s and/or removal of trade barriers.

        If that is done then we can let things play out the way they should.

        • 0 avatar
          Pch101

          Again, I know that you aren’t really knowledgeable about these things — you simply type the same rhetoric over and over again.

          But if we ignore you and focus on the real world, then it isn’t hard to figure out that Japan has shifted production of these trucks to places such as the US and Thailand. They don’t build them in Japan anymore.

          The US obviously has no problem getting Nissan and Toyota pickups right now. They’re built in the NAFTA zone.

          And the US is currently involved in the Transpacific free trade negotiations. Guess who else is part of those same FTA negotiations? You guessed it: Thailand.

          Do some research next time. It will help the quality of your postings (which at this stage could only improve.)

          • 0 avatar
            Lou_BC

            @Pch101 – and are those tariffs lifted ? Nope.

            You answered the question for me:

            “Japan spent decades protecting its market, then dropped the tariffs when the domestics were secure. Between the entrenchment of the domestics and the declining demographics, there isn’t much of a market left for anyone else.”

            That does apply to the USA.

          • 0 avatar
            Pch101

            Since you are utterly obsessed with tariffs, you should be pleased to know that the effective tariff on pickups built in Japan is zero. There aren’t any left to import.

          • 0 avatar
            Lou_BC

            Pch101- since you can’t post evidence to support your claims you are now accusing me of being obsessed……..

            damned funny stuff.

            1st step – insults and questioning my intellect

            2nd step – insults and questioning the intellect of the authors of my evidence

            3rd step – insults and label me a fanatic

            what’s the 4th step?

            Predator drones or a midnight SEAL strike?

            I didn’t know chicken worked so well for catching suckers.
            (BTW sucker is a name of a bottom feeding fish we have where I live).

          • 0 avatar
            Pch101

            Your inability to Google even basic information leads to these tedious comments of yours.

            If you want to know where the Japanese automakers build their trucks, then this is easy stuff to find out. The companies don’t make a secret of where their vehicles are assembled. Toyota, Nissan, etc. moved their small truck production elsewhere.

            The Transpacific FTA negotiations are reported in the news. A little bit of time using that website that frightens you so — Google — would lead you to news stories that would show quite clearly that the US and Thailand are both involved in the process.

            Your inability to learn information is not my problem. You must have been a terrible student; you obviously never learned how to look things up.

          • 0 avatar
            Lou_BC

            @Pch101 – Google? Really?

            Maybe you could teach me to use Google since i’m used to using EBSCO(CINAHL), Cochrane Library, OVID, PUBMED etcetera.

            You must use Wikipedia a lot.

            I’m sure that your a trusted source of information around your 3×3 cubicle.

          • 0 avatar
            Pch101

            I don’t have enough background information to explain the root causes of your ignorance.

            What I do know is that even very basic facts just pass you right on by.

            Go find out where Toyota builds its Hilux. You will note that Japan is not one of those places.

            Go find out where Nissan builds the Navara. Hint: You won’t find a Navara plant in Japan.

            There is all sorts of information that will show you who is building trucks in Thailand.

            It doesn’t take much to read the headlines about the TPP trade negotiations, and to see that the US and Thailand are both taking part.

            If you spent less typing inane comments and more time learning, then you might have something reasonable to say. But you don’t, so you don’t.

          • 0 avatar
            Lou_BC

            @pch101 – odd train of thought you wondered off on.
            FYI…..
            Tourette’s syndrome is a treatable disorder not a blogging style.

        • 0 avatar
          RobertRyan

          Vehicle production is moving to Mexico as far as NAFTA is concerned and that process should speed up

  • avatar
    genuineleather

    The Japanese market is difficult to crack because it’s already overstuffed with domestic manufacturers.

    The US market, with 15 million vehicles sold annually, has three volume manufacturers; the Japanese market, at 1/3 the size, has their own big three, plus Mazda, Subaru, Mitsubishi, and Suzuki.

    Between the seven of them, 99% of Japanese customer needs are met. Intense competition pretty much demands it. So why bother with marginal foreign brands that don’t cater to the local market at all?

    • 0 avatar
      Eyeflyistheeye

      Good point you make.

      The Japanese car buying problem never had problems with trust, quality and durability from their manufacturers as we did here in the United States.

      Had just either Ford, GM or Chrysler never decided to go penny-wise and pound-foolish in making their cars and adjusting to the market, the same would be happening here.

    • 0 avatar
      Pch101

      That’s certainly a lot of it, but it’s not the only issue.

      The kei car market provides a base of sales for the domestics that provides them with an inherent home team advantage, as they are a Japanese-specific product that nobody else makes or has a reason to make.

      The Europeans also claim that the Japanese approach to type approval hurts them, as the process slows things down (and therefore raises costs), plus stifles innovation.

      Japan spent decades protecting its market, then dropped the tariffs when the domestics were secure. Between the entrenchment of the domestics and the declining demographics, there isn’t much of a market left for anyone else.

      • 0 avatar
        Lou_BC

        Pch101 – “Japan spent decades protecting its market, then dropped the tariffs when the domestics were secure. Between the entrenchment of the domestics and the declining demographics, there isn’t much of a market left for anyone else.”

        odd how that same logic does not apply to small pickup trucks in the USA………… hmmmm.

        Thanks for that pearl of wisdom.

        • 0 avatar
          Pch101

          It should be pretty obvious that the US domestics are far from entrenched; they’ve lost market share to foreign OEMs for decades.

          There’s no comparison to Japan at all, where imports are an insignificant part of the car market.

        • 0 avatar
          RobertRyan

          @Lou_BC I owner what UAW script he reads from They are happy when imported vehicles come from the NAFTA area, but seem unconcerned that a lot of production is continually ending up in Mexico

          • 0 avatar
            Lou_BC

            @robertRyan – Pch101 is hilarious………….

            I have to assume he is trying to be funny.

            The psychological implications of any alternative are creepy.

    • 0 avatar
      RobertRyan

      Correct. They only want, some European exotica

  • avatar
    George B

    I wonder if GM would be better off to use the Holden brand for 1st world LHD cars for Australia, New Zealand, and Japan, using Chevrolet for the less expensive, lower safety standard 3rd world LHD cars for India, African countries, etc. However, there may be a big cultural issue in trying to sell Korean Daewoo cars to the Japanese independent of brand.

    GM New Zealand: http://www.holden.co.nz/

    GM India: http://www.chevrolet.co.in/

  • avatar
    Eyeflyistheeye

    If Cadillac would just introduce a small pickup truck, they’d be able to purchase Tesla and have enough left over to pay off the US deficit.

  • avatar
    ccode81

    The used car dealer I bot my Jag has a lot of knowledge on American cars as well. one story from their blog.
    If anyone goes to this snob dealership on this article to quote for Chevy Astro post 99’s AWD transfer motor, which breaks frequently, your price is JPY 119,700. my guy can import an after market altanative parts from US for less than JPY 30,000 including shipping fee.
    Don’t know how this happens, but good luck to GM and Yanase.

  • avatar
    motormouth

    Er, Cadillac in Japan. Big cars, tiny roads. So to sum up, that’s BIG cars… on very small roads.

    Next up, why square pegs don’t fit in round holes.

    • 0 avatar
      Pch101

      That doesn’t explain why Mercedes has moved over 31,000 units in Japan this year, while Cadillac’s volume was less than 500.

      Cadillac’s primary hurdle is a lack of cachet value. The world generally does not associate “luxury cars” with “American.” The market for imports in Japan is already tiny as is, which doesn’t leave much room for GM.

      • 0 avatar
        motormouth

        2012 top three sellers C-, E- and B-Class
        2013 A-, C- an E-Class
        2014 A-, C- an E-Class (yes, the same, not just C&P error)

        So the Japanese buyers are not going for big Mercs.

        It’s worth noting that sales of the S-Class have increased four fold between 2013 and ’14.

        • 0 avatar
          ccode81

          S class sized cars tends to be bought for big coorporate’s chauffeur car, or by small business owners who wants to register it under company name just to shrink the taxable profit while having something luxury for private life.
          Under certain local tax bureau’s assessment, imported and over 10 mil yen price car has chance to be rejected for something unnecessary for business use. The closed mind of those tax bureaus somehow never question for anything domestic and with 4 doors, where Lexus LS is a safe pick. Ever since the make over from Toyota Cersior to current LS, which grown in size, engine capacity and price, it seems to be fulfilling the buyer’s greed of showing off the wealth.

        • 0 avatar
          Pch101

          Cadillac offers the ATS and CTS in Japan. Those are direct rivals of the 3/C/A4 and 5/E/A6, with sizes to match.

          It isn’t the size of the cars, it’s the lack of heft of the brand.

          • 0 avatar
            motormouth

            I’m actually surprised Cadillac doesn’t do better in Japan, considering the country’s love of American culture. That said, I’m guessing they’re pretty damn expensive there. Here in the UK, an entry-level ATS is almost £35K and if you factor in the relatively inefficient engines it’s both more expensive than an entry-level 3-Series and would cost more to run. Quite frankly, if GM was serious about getting any notable marketshare for Caddy in Europe, they’d lowball the market, but the pricing strategy shows it’s not a priority.

    • 0 avatar
      Noble713

      Re: pricing, looking at Goo Net Exchange (a site for finding cars in Japan, mostly used), Cadillac ATS’s are about $45-50k new, which is actually cheaper than most of the Lexus IS models available (they cost more in Japan than they do in the US, Japanese big businesses thrive on raping the wallets of their domestic consumers). It also has to compete with the Toyota Crown, which IMO is like the RWD Buick of Japan: the default choice for aging men who want comfort and features.

      The biggest obstacle is lack of RHD models. There’s a surprising number of Cadillacs here in Okinawa, and yes, American cars in general are popular with certain niche markets. There’s an entire magazine devoted to American car tuning. Some of the yakuza-associated club owners I know here are always seen in American cars: a C5 Corvette, an H2 Hummer, and a Chrysler 300, with the latter two of course on giant crome rims.

      But when you can get RHD BMWs and Mercs, LHD Cadillacs just don’t make much sense for luxury buyers, who want convenience. And sports cars are all insanely priced. A new C7 is ~ $100k here. Even used V8 Mustangs are about ~$45k+. And those big-displacement engines will rape you come tax time (my *annual* road tax is ~$450…for a 2.5L I6-engined sedan). If you have an engine of 6.0L+ it’s more like $1,000…. 0_0

    • 0 avatar
      CoreyDL

      You can’t really use that excuse. Japan made/makes their own “big” cars, which are the same size or larger than any current Cadillac.

      Cedric
      Gloria
      Aristo
      President
      Century
      Crown Comfort (AKA every single taxi)
      Countless others.

  • avatar
    ccode81

    Few points.
    Sorry I cannot find reference but from article I read many years before, Japan was largest exporting market outside north america for Cadillac for many decades. That was before China’s emergence. Only showing how much GM had no interest of exporting it for long time.
    ATS is priced 4.69 million yen tax inclusive for 2 liter turbo model, so cheaper than your local price.
    Their problem now is distribution network and image I think.
    They tend to be sold at Yanase where merc and Audi sits together in showroom, hardly been picked after direct comparison of interior finish level.
    Also, it has been typically driven by gangstars in the past, and somehow hugely popular as hearse…


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