Japanese Auto Makers Crack The Closed Market
While the eternal debate about whether Japan is or isn’t a closed market continues to rage onwards, the Nikkei reports that a new phenomenon is occurring in Japan: imported vehicles from domestic brands are starting to trickle in.
Previously, only a very limited number of imported nameplates trickled into the Japanese market. The Ohio-built Honda Accord Coupe was one of the most famous examples, with right-hand drive units sent back to Japan and marketed specifically as an American-built vehicle.
Even though the yen has weakened – a key factor in the decision to set up overseas manufacturing facilities – Japanese OEMs aren’t so eager to move production back home. As the Nikkei reports
In some cases, the economies of scale from building cars where they sell the most makes those vehicles more competitive than those produced domestically. So the automakers are moving to import these models to beef up their domestic lineups… ‘Each automaker has taken risks to conduct capital investment abroad, so it’s unlikely that the trend to manufacture locally will change as a result of exchange rates returning to earlier levels,’ says Japan Automobile Manufacturers Association Chairman Fumihiko Ike.
While models from lower cost locales like Spain, Hungary and Thailand will be brought to Japan, Honda will be bringing the Ohio-built Acura NSX over, albeit as a low volume halo car. Nevertheless, it’s an interesting twist of events, given that the Plaza Accord and voluntary export restrictions aren’t too distant a memory for many people.
More by Derek Kreindler
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Japan is special case- 1st we must divide market to 2 halfs, 1st half - normal - regular vehicles, 2nd half - mini cars - kei cars I know beginning of the year was stronger with people buying before new tax was imposed, but so far last few montsh were solid - far better than everyone anticipated, no horror scenario so far happened after tax increase So 2014 numbers - total market UP 6.0% JAN-SEP YTD REgular vehicles 4.5% UP, KEI CARS 8.3% UP Total market4.318m , Regular vehicles 2.578m and kei cars 1.74m cars for JAN-SEP period So Kei cars are this year above 40% market share - where foreing automakers are non-existent - that´s huge part of market only for domestic players So about 60% of the market is avalaible for all other players- Germans, US and so on - so for JAN-SEP foreign companies have 8.3% share in regular vehicle market - that´s not big number, but they don´t have factories in Japan, so it´s pure exports and 8.3% is not so bad if we look at fact that Japan has most domestic brands-automaekrs from all players, not even US has currently so many US brands - but sitution is very different in the US with many plants from foreign automakers, - look at this you are Japanese - very proud nation with at least 10 domestic automakers with great quality and everything - why would you buy foreign imports? unless it´s premium brand - that´s why germans are so popular and any other are not... I think Japan is kind of closed market, but if we look at numbers and facts it´s not so horrible i believe, Korea was at similar numbers, but last 2 years were strong and now foreign brand have i think 13% share
So Bertel was right.
It sounds as if the Nikkei got this backwards. According to the Japan Automobile Importers Association: New registrations of imports by Japanese automakers, January-September 2013: 53,389 New registrations of imports by all automakers, January-September 2013: 257,837 Market share of imports by Japanese automakers: 20.7% New registrations of imports by Japanese automakers, January-September 2014: 36,939 New registrations of imports by all automakers, January-September 2014: 250,400 Market share of imports by Japanese automakers: 14.8%. Their imports by Japanese automakers actually fell by 31%, faster than the import market as a whole. In any case, that's not a lot of cars in either instance. Japan's auto market is largely domestic.
Slow Nikkei day.