Everyone was worried about "the Japanese." The yen was falling, fell 15% against the dollar, and this meant "the Japanese" could cut prices below Detroit's, or take home more profits, or cut prices and take home more profits. The products were getting good again, too.
Variable-everything engines, all-wheel-drive, stability systems, five-speed automatics, electric cars, plus new minivans and sport/utilities to take business away from Detroit.
So what happened?
After five months, market share of the eight Japanese vehicle companies has fallen, nearly 2 points, down to 22.3% of the market from 24.2%.
Production at three of the eight Japanese-owned North American assembly plants is down from last year.
So what happened?
Then it dawned on me. There aren't any "Japanese." They don't exist. There are only auto companies. There's Toyota and Honda that are big and successful here. Then there is everybody else, cameo players who don't sell enough to bother anybody. Each has its own story.
Suzuki: Only 29,000 sales last year, down 20% from 1996. During the first five months of 1998 sales reached 18,000, up 39% from last year. For 1999 Suzuki has an improved version of its little SUV, but it's a tiny niche. Remember, GM has a small piece of Suzuki.
Isuzu: Another small player: 91,000 mostly-SUVs in 1997, down 3% from '96, while this year's sales through May hit 35,000, down 10%. The SUVs are new, but so what? The numbers are peanuts. Also, Isuzu assembles in Indiana, and is partially owned by GM, although Isuzu operates independently here.
Subaru: Also a bit player despite all the publicity, but a well-run outfit; 133,000 sales last year, up 11% from 1996, but less than 1% of the market. Through May this year, sales are climbed 17% to 53,000. Look at it this way: Subaru saved Detroit research money by proving there's a market for an all-wheel-drive wagon.
Those little players are quite different from each other and no threat to anybody. Let's move to the next level.
Mitsubishi: They'd be better off if they never discovered America: $1 billion in losses the past few years, plus the sexual harrassment suit at the Illinois factory.
Sales last year: 189,000, down 1% from '96, and down 18% from 239,000 in 1994. So what's wrong? Maybe it's the name: Four syllables. Most car names don't have more than three.
Mazda: Another largely undistinguished line (except the Miata) with weak dealers. Sales through May totaled 97,000, up 2%, but it's still not much compared to a few years ago.
Ford controls Mazda. Maybe Ford should take it over completely and make it a third division.
Now we get to the big three of Japan. Again, each is different.
Nissan: You know the story - 738,000 sales last year, down 3% from '96, and a collapse this year, 231,000 through May, down 28%.
Everyone's got a reason: tired product, terrible advertising, no brand recognition. I say Nissan offended the Marketing Gods by killing the name Datsun, and this is all some cosmic punishment.
Whatever the reason, it's trouble, particularly at that big Tennessee factory. As they slash production without layoffs, it must raise production costs.
Toyota: Largest of the Japanese automakers. All signs say this year should be a winner: a hot car in the Camry, a new minivan, a new Solara coupe coming this summer, new Lexus models, and a new pickup coming at the end of the year.
It hasn't happened. Last year's sales of 1,133,000 were 5% ahead of the year before. But sales through May dipped 3% to 518,000. Maybe the Camry was oversold last year when Toyota went all out to make it the No.1 seller. Maybe it's worn out a bit of its welcome and become a bore.
Don't cry for Toyota yet. Don Esmond, vice president and general manager of Toyota division, promises the second half will be strong enough to make '98 Toyota's best sales year ever in the U.S.
Honda: This is Honda's year. Through May sales totaled 399,000, 10% ahead of its '97 pace. It looks like a million sales in the U.S. for Honda this year, despite no V-8, no pickup, a weak minivan (to be replaced this fall) and a weak compact SUV.
What Honda is proving is that cars still sell if they are the right cars.
Imagine if Chevrolet, with 4,300 dealers, were selling the Chevy Accord.
One million sales! Probably the same with Civic. Honda is the one bigtime success among the Japanese so far this year.
The point of all this was to show that each of the eight companies has its own problems and its own successes. It's the same old story: good product and good marketing turn into good sales.
There really are no "Japanese." - - - Jerry Flint is a columnist and former senior editor of Forbes magazine.
