#Imports

When we talked about Japanese auto sales in 2011, we told you that sales of imported cars were missing, and that they would be available today. They are. Aided by a shortage of domestic cars and a strong yen, Japanese connected with their inner gaijin and bought 22.5 percent more imported cars in 2011 than in the year before. According to data released by the Japan Automobile Importers Association, 275,644 foreign-built vehicles entered the allegedly closed Japanese market, gaining a market share of 10.3 percent.

One question that Bertel and I find ourselves returning to again and again in our regular conversations is “what will be the first Chinese-made car sold in North America?” We’ve agreed for some time that the groundbreaking first Chinese-made import would come from an established non-Chinese brand, rather than one of the many newer Chinese brands, but our usual suspects typically ranged from GM to Volvo (EV maker Coda builds what are essentially “knock down” Chinese made-cars, but technically they qualify as US assembled, as does Wheego). I don’t think the name “Honda” ever came up in these discussions, but sure enough, the NY Times reports

the Japanese automaker Honda is crossing the threshold by importing subcompact cars into Canada from one of its plants in China. This month, Honda Canada began receiving its smallest model, the Fit, from China instead of Japan, as part of a strategy to produce more vehicles outside its home country.

The decision allows Honda to eke out higher profit in a segment of the auto market where margins are extremely thin, especially since the high value of the yen cuts into all Japanese automakers’ overseas operations.

“The yen has been getting stronger and stronger,” Jerry Chenkin, executive vice president of Honda Canada, said on Tuesday.

Of course, Honda has yet to bring a Chinese-made Fit to the US, where antipathy towards Chinese products is greater and automotive diversity is lesser than in the Great White North. Also, the importation of Chinese Fits is seen as a temporary response to the high Yen, while Honda builds a new plant in Mexico for Fit production, scheduled to open in 2014. Still, this is a significant development, presaging the inevitable importation to the US of Chinese-built vehicles.

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:

Though we owe Jalopnik a few well-deserved raspberries for this week’s inane tease-n-reveal of some wildly overhyped and under-delivering “renderings” of the 2014 C7 Corvette (look it up if you must), we’ve actually got to tip our hats to the Gawker site for finding a truly relevant petition at the White House website. The petition’s goal?

Stop using Homeland Security funds to seize imported vehicles, and change the DOT/EPA exemption to 15 years.

The Department of Homeland Security spends a shockingly disproportionate amount of its budget not on security initiatives, but on customs seizures. In particular, importers of grey-market vehicles have been targeted by monies taxpayers have intended to be used to secure our country against terrorism and terrorist activity. We call upon the Executive Branch to immediately cease this wasteful activity, and furthermore to change the DOT/EPA exemption time on grey-market vehicles from 25 years to 15 years (to match the vehicle regulations of Canada), recognizing that the 25-year rule was enacted due to support from special interests such as Mercedes Benz North America.

This is the kind of cause that we can absolutely get behind. In fact, if TTAC and Jalopnik combined can’t get under 22,000 readers to sign it… well, it will be Jalopnik’s fault. They’re a much bigger site. Seriously though, please sign this. There’s no guarantee that this will change anything, but as long as future generations can grow believing that they too might be able to someday import some awesomely clapped-out foreign jalopy that will demand all of their spare time and money just to stay running, well… the world just might become a better place.

Done signing the petition? Why not tell us what 15 year-old car you would import if you could?

According to U.A.W. talking points, the Japanese car market is closed to foreign imports, and the yen is kept artificially low. Utter insanity on both counts. The customs duty on new cars imported to Japan is exactly zero, and the yen is so obscenely expensive that Japanese carmakers openly threaten to leave and privately are shifting as much production as possible out of the country. Unbeknownst to talking point readers, Japan has had a thriving car import market for decades. For more than a year, imports to Japan showed an uptick. TTAC has been taking about this for quite a while, here, then here and also here.

Today, The Nikkei [sub] did wise up to the fact that imports are getting hotter in Japan despite a tepid new car market. The Nikkei sent a reporter to an Audi showroom, interviewed a BMW customer, and noted a societal change: “My wife prefers foreign cars, so that’s why we bought one,” a bank employee who traded his domestic car for a BMW told The Nikkei. “They have lower fuel efficiency than Japanese cars, but that is not a big problem because we drive only on weekends.”

Now what’s really going on with imports to Japan? Let’s look at it a little closer.

Anonymous writes:

Dear Sajeev and Steve,

I have the misfortune of working with a bunch of aspiring Yuppies. You know the types. The ones who believe that all American car companies make crap and the only true luxury cars come from Germany and Japan. Never mind the $1300 maintenance charge on their Audi or the fact that the Lexus ES is about as exciting as wilted corn flakes.Long story short, I am sick and tired of hearing their crap. I want to buy the type of American car that will take these pompous, sniveling wussy boys and blow their stuck-upityness right out of their ass.My choices are the following…1) Corvette – preferably one with a muffler package that sounds like a roving gang of Hell’s Angels ready to roll.2) Silverado – One with all the options. Throw in some Bigfoot tires so that I can roll over those little prissy scootmobiles.3) Hummer H2 – Instead of a horn I would get four bullhorns and have them blare out lines from Ah-nold’s movies and Jesse Ventura’s speeches with every beep. Maybe a few fart noises too.4) Chevette – I’m thinking if I go in dressed like this guy one day, and buy a few accessories along the way, I should be all set.5) Adams Probe 16 – One of only three made. But built for a good purpose.OK, I’m exaggerating with all this. But really. I want to get a luxury car that is All-American and the absolute best in it’s class. Price limit $40k. New, used, doesn’t matter. What do you recommend?

When you have nothing else to do down the road and read Japanese car import statistics, and when you will see a small bump of imports from Europe to Japan, remember what you did read here. Toyota will start importing its UK-made Avensis to Japan, where it will go on sale on September 19 for 2.5 million yen ($31,000).

Some people are still worried about the Chinese trade imbalance. They should look at the car industry. Car-wise, China’s trade is shockingly imbalanced, a report of Chinas automotive industry association CAAM shows.

For years now the Chinese automakers have been the bête noir of the global car industry, inspiring equal parts fear and contempt in boardrooms and editorial meetings from Detroit to Stuttgart. In an industry built on scale, China’s huge population and rapid growth can not be ignored as one scans the horizon for dark horse competitors. And yet no Chinese automaker has yet been able to get even a firm toehold in the market China recently passed as the world’s largest: the United States.

Certainly many have tried, as the last decade is littered with companies who have tried to import Chinese vehicles, only to go out of business or radically rethink their strategy (think Zap for the former and Miles/CODA for the latter). Others, like BYD (or India’s Mahindra), have teased America endlessly with big promises of low costs and high efficiency, only to delay launch dates endlessly. In short, a huge gulf has emerged between overblown fears of developing world (particularly Chinese) auto imports and the ability of Chinese automakers to actually deliver anything. No wonder then, that we found what appears to be the first legitimate attempt at importing Chinese cars to the US quite by accident…

The trade war that erupted between the US and China late last summer may have cooled to an angry simmer, but its effects are once again being noticed in the automotive industry. After President Obama slapped a 35% tariff on imports of Chinese-produced tires, the Chinese government started casting around for potential objects of retaliation, and, as Bertel reported, US auto exports to China made “a good tit-for-tat.” The US imported $1.8b worth of Chinese tires in 2009, while China imported $1.1b worth of US-built cars (including transplant brands) in 2008. You shoot our dog, we’ll kill your cat.”

Now, the Chinese Ministry of Commerce has concluded its “investigation” into US auto dumping and illegal subsidies in the Chinese market, and it just so happens to single out the two automakers who are partially owned by the US. Coincidence? Not so much. [Hat Tip: Michael Banovsky]

In January, car imports to Japan shot up 53 percent, reports Automotive News’ [sub]Asia Editor Hans Greimel from Tokyo. Quick, who do you think takes top honors?

There is one area where the feared Chinese export machine is way behind, and this is cars. According to data published by the China Association of Automobile manufacturers CAAM, 566,200 units were exported in 2010. At and in the same time, China imported 813,600 units.

Again, China’s vaunted export machine received a black eye: China imported more cars in 2010 than it exported. Of the 18.27 million cars China produced in2010, a pittance of 2.98 percent left the country according to statistics released by China Association of Automobile Manufacturers (CAAM) via China Autoweb.

In the 80s, there were just 4 car brands in Brazil, all domesticated animals, carrying familiar names such as Volkswagen, Fiat, Chevrolet, and Ford. The luxury car at that time, for which we had the privilege of paying over US$50,000, was the (modernized, but nonetheless a 1960s Opel Rekord) Chevy Opala. Then, the 90s came along and bang, the market was blown wide open.

With the economy pretty still mostly on the ropes all over the world, the favorite policy appears to try to export yourself out of the crisis, and to keep imports to the barest minimum. In pretty much all countries but one. Would you believe it: China.