Why Ford And Other American Cars Don’t Sell In Japan

Summary

Japanese automakers dominate the U.S. market, employing many American workers, yet face a stark contrast in Japan where they struggle to gain a foothold. Despite no tariffs, U.S. automakers, like Ford and GM, are challenged by Japan's closed regulatory process and cultural preferences for compact, efficient vehicles. U.S. cars are viewed as inefficient, and their market share in Japan is minuscule. The Japanese market's unique dealership experience and longstanding perceptions of American cars further hinder their success.

Takeaways

• 🚗 Japanese car brands are very popular in the United States, with several being among the best-selling automakers.
• 🏭 Japanese automakers employ many American workers and build a significant portion of vehicles made in the U.S.
• 🚙 American automakers struggle in Japan, with Ford leaving the market entirely and General Motors maintaining a minimal presence.
• 🛑 Critics argue that Japanese protectionism, including technical barriers, hinders U.S. car sales in Japan despite the absence of tariffs.
• 📉 U.S. automakers have less than 1% market share in Japan, with only a few thousand vehicles sold annually.
• 🏙️ Japanese consumers have specific needs, such as Kei cars, which are not offered by American automakers and account for 40% of the market.
• 🚍 American automakers excel in larger vehicles like pickup trucks and SUVs, which do not align with Japanese consumer preferences.
• 💼 The Japanese car buying experience is highly service-oriented, with dealerships offering a level of hospitality that differs from the U.S. model.
• 🛍️ Japanese buyers often custom-build their cars, a practice that is facilitated by local supply chains and factories, making it difficult for foreign automakers to compete.
• ⏳ Perceptions of American cars as inefficient and unreliable persist in Japan, despite improvements in recent years.
• 🌐 The challenges faced by U.S. automakers in Japan are part of a broader pattern of struggles in various international markets.

Q & A

Why do Japanese brands sell well in the United States?

Japanese brands sell well in the United States because they dominate certain segments in sales and critical acclaim, offering vehicles that meet American consumer preferences and often employing American workers in their U.S. factories.

How significant is the contribution of Japanese automakers to the U.S. vehicle production?

Japanese automakers are significant contributors to U.S. vehicle production, building a third of all the vehicles made in the U.S.

Why are American vehicles not popular in Japan?

American vehicles are not popular in Japan due to a combination of factors including Japanese consumer tastes, perceptions of American cars as inefficient and unreliable, and the dominance of Japanese brands that cater to local needs and preferences.

What is the market share of American automakers in Japan?

All three Detroit automakers have less than 1 percent market share in Japan, with Jeep selling about 10,000 vehicles annually.

What are 'Kei cars' and why are they popular in Japan?

Kei cars are tiny vehicles preferred by drivers who navigate narrow streets and crowded cities in Japan. They make up 40 percent of the Japanese market, and U.S. automakers do not produce them.

How do Japanese dealerships differ from American dealerships in terms of customer service?

Japanese dealerships offer nearly white glove service, including amenities like cafes and complimentary car washes, and follow up with customers even years after a purchase, which is a stark contrast to the traditional buying experience in the U.S.

What role do technical barriers play in the difficulty U.S. automakers face in selling in Japan?

Technical barriers, such as a closed regulatory compliance process and different standards, make it harder for U.S. companies to sell in Japan, despite the absence of Japanese tariffs on U.S. imports.

How have perceptions of American cars influenced their sales in Japan?

Perceptions of American cars as inefficient and unreliable, stemming from the 1960s through the 1980s, have influenced their sales negatively in Japan, despite improvements in recent years.

What challenges do U.S. automakers face in international markets outside of Japan?

U.S. automakers face challenges in various international markets including South America and Europe, and China, the world's largest car market, is becoming tougher due to slowing economic growth, increased competition, and trade disputes.

What is the historical context behind the Japanese preference for efficient and reliable vehicles?

The historical context is rooted in the rise of Japanese automakers, who gained a reputation for building solid, efficient cars that don't break down, while American automakers faced criticism and scandal over less reliable vehicles during the same period.

What could be the future implication for U.S. automakers if they continue to struggle in international markets?

If U.S. automakers continue to struggle in international markets, they could become primarily American companies that sell trucks and SUVs to Americans, missing out on global growth opportunities.