As U.S. auto makers continue their gut-wrenching layoffs, the search for a scapegoat is building. Now the blame-someone-else crowd is accusing Japan of closing its market to American cars.
I’ll be the first to agree that Japan is a very difficult market to break into. But the truth is American auto makers have never made much of an attempt to sell U.S.-made cars in Japan. In fact, they don’t do a good job of selling U.S.-made cars anywhere in the world. But let’s stick to Japan for the moment.
To be successful in Japan, you need to build cars with the steering wheel on the right-hand side. The only U.S.-based GM,or plant I’m aware of that builds right-hand-steer vehicles is the Jeep Liberty plant in Toledo, OH.
In Japan, nearly 45% of the market is minicars, that is, cars with engines under.06L. We don’t make anything like that. We make much bigger vehicles. Heck, many of our vehicles won’t even fit on some their streets.
Any vehicle with an engine over 2L in Japan is taxed at a higher rate, which includes just about everything we make. The point is, there’s not a whole lot of American cars that fit their market. It’s mostly dinky cars with dinky engines.
That’s a key reason whyand have made minimal attempts to export cars from the U.S. to Japan. In the 1990s GM tried selling one Saturn model there. In fact, GM even cut a deal with to sell the Chevy Cavalier in Toyota dealerships. Both cars flopped miserably. The Japanese consumer is very demanding, and these cars simply were not competitive.
Ford made a feeble effort to sell re-badged Mazdas as Fords, but that approach went nowhere.
Another big reason why Detroit-based auto makers have not made much of an attempt to break into Japan is that for most of the last 30 years, they bought big chunks of Japanese companies. Chrysler owned part of. Ford owns part of . GM owned or owns part of Suzuki, and Subaru. That’s how they “broke into” the Japanese market.
A decade ago on a visit to Japan, I had a fascinating discussion with people from the Ministry of Foreign Affairs. “Why do the Big Three try to negotiate with the Ministry of International Trade and Industry?” they asked me. “Don’t they know the former chairman ofruns that ministry? If they have any problems, they should come to us, not MITI.” Of course, no one ever called.
For all the complaints that Japan is a closed market, on a percentage basis, Mercedes andsell nearly the same level of cars in Japan as they do in the U.S.
Yes, it’s a very difficult market to break into. But no, it’s not closed. So go find another scapegoat.
John McElroy is editorial director of Blue Sky Productions and producer of “Autoline Detroit” for WTVS-Channel 56. Detroit, and Speed Channel.