Apr 14, 2016

    Foreign car brands stall in Japan, save for luxury ones


    BUSINESSMAN Randal Furu-dera is not about to swop his BMW M5 for a Japanese car although he will give the latter some grudging respect for dependability.

    Deep-pocketed buyers like Mr Furudera are driving sales in Japan of high-end foreign brands, which dominate the niche sector in a car market long seen as all but shuttered to overseas automakers.

    Mid-range foreign cars are a rare sight on Japanese streets but it is not hard to spot a Porsche or a Lamborghini.

    Sales of the Italian sportscar in Japan doubled to about 300 in 2015 from a year earlier.

    The jump comes as United States car giant Ford announced in January it was quitting the country, blaming the "closed" market, after it sold fewer than 5,000 cars last year.

    Less than 6 per cent of the more than five million vehicles sold last year in Japan - the world's No. 3 car market - were made by foreign firms.

    In 2013, former Ford boss Alan Mulally accused Tokyo of manipulating the yen's sharp decline to gain a trade advantage for domestic firms, which sell millions of vehicles overseas, including top markets China and the US.

    The imbalance has not gone unnoticed by US Republican party front runner Donald Trump. "When did we beat Japan at anything?" he had said in a speech last summer to announce his run for the presidency.

    "They send their cars over by the millions, and what do we do? When was the last time you saw a Chevrolet in Tokyo? It doesn't exist, folks."

    He is not far off - Chevrolet and Cadillac maker General Motors sold a puny 1,600 vehicles in Japan last year.

    But it is a different story for prestige foreign brands whose success did not come without a fight. They had to "overcome stereotypes like Western cars break down easily or they're expensive to repair", said Miki Kurosu, communications director for BMW Japan. It sold about 46,000 vehicles last year, along with 21,000 Minis.

    Japan's luxury-car market has remained frothy despite a years-long downturn in the economy.

    Rich drivers rarely switch brands and the domestic automakers were late to the party.

    Nissan considered selling its high-end Infiniti brand at home, as Honda did with Acura. Toyota has also struggled to score big with its Lexus in Japan though sales have been on an upswing lately.