Japan free trade talks with EU a 'masquerade' - Ford

A few too many "yoroshiku onegaishimasu"s from the old farts up top, me thinks.

This is how it will ALWAYS be.

Japan will never truly open up to so-called free trade. They might pretend to lighten a few regulations but deep down they know that if they try to compete, they will lose more than they will gain. Ever heard how fantastic and extra tasty Japanese meat, fruits or rice are? And how nobody raises an eybrow over having an apple cost 400-500 yen? Because it tastes soo good compared to "foreign" ones? If people could suddenly get lower priced produce, and discover that there is nothing wrong or strange with it, I think they would choose reasonably priced over jacked-up-national-pride-and-hallelujah priced produce any day.

That must be very scary.

masquerade means "Sakura" in Japanese? sincere advice to foreign auto makers : Drive Your Dreams and no serious business with Japan.

Haha. Lots of ouchy ouch from one of the "sensitive" industries.

Is Biegun talking about some kind of utopia? Truly free. Not even his own government wants that.

There's gonna be lots of whinging in the next couple of months, here in Japan as well, for example in the agricultural sector. Governments will try to protect their weak but in the end if you're just crap, admit it.

They might pretend to lighten a few regulations but deep down they know that if they try to compete, they will lose more than they will gain.

Oh, I see. Government calculations put their net total in the black if they join the TPP, even if they abolished all tariffs and got hammered in agriculture for example.

Ever heard how fantastic and extra tasty Japanese meat, fruits or rice are?

I just had some fruit - it was fantastic and extra tasty and just what I needed to get over this cold. Don't buy that much meat but the rice I eat is also fantastic and extra tasty.

And how nobody raises an eybrow over having an apple cost 400-500 yen?

Are you buying them in Ginza? You should be able to buy a bag for that amount.

Can anyone enlighten me on what the US auto manufacturers actually want from the Japanese government in these negotiations?

...and by that I mean: can anyone provide specific examples of regulatory barriers that need to be addressed or specific government policies (of the kind that are written down) that unfairly position import autos in the marketplace that need to be changed?

Japan has zero import duties on car imports and talks are expected to focus on non-tariff barriers, such as differences in regulations between cars accepted in the different markets.

And what are the non-tarriff barriers US automakers complain about? "Could you please lower your polution standards so we can sell our poluting cars in Japan?" Anyway, they have dealerships here in Tokyo. Why don't they advertise their presence in Japan? Nobody knows about it. Put some juice into it!! Like the Japanese in the US. That is why we sell well there. We WORK at it. US does no longer understand "work".

ALL three have their own emission, safety, homologation and other standards and regulation and each nation mandates that the cars needs to pass through their tests in order to be certified.

Beside Japan the other two wants Japanese regulations and standards abolished since they had passed within their own standards. Japan on the other hand puts all cars in their passes and do all the mandatory test so they can sale their car in each perspective markets.

Bottom line is compared to US and/or European markets which are large single markets Japan's market is small and they do not want to invest the extra cash to sell in a small market with very high competition.

farmboy: Mercedes, BMW, VW...

I think he's talking about manufacturing rather than sales - but what I don't understand is how the absence of a Ford assembly plant in Saitama is the fault of the Japanese government.

What Japan should really do is negotiate with various SE Asian nations for them to accept the Japanese standards in which case the Japanese standard market will become larger forcing the other two standard market to comply.

I agree. Japan is a lost cause. European carmakers and other globally savvy and successful players view this market simply as not worth the effort.

Japanese companies want free trade simply to escape from their own appalling domestic market, and that's all. And that's not what free trade is about.

JeffLee: European carmakers and other globally savvy and successful players view this market simply as not worth the effort.

...at the exact moment I read that, an Audi commercial came on TV.

Been seeing a lot of them recently, as well as Benz and BMW, and of course the VW ads for the new new beetle thing.

That's a lot of effort for something not worth the effort.

"There’s not a single foreign (car) manufacturer in Japan..."

Perhaps, but Renault owns 44% of Nissan. That represents a large European stake in manufacturing in Japan. And until a few years ago, Ford held 33% of Mazda.

japan is interested in looking after Japan and who can blame them .... these free trade deals usually work in favour of multinational companies at the expense of countries...

European carmakers and other globally savvy and successful players view this market simply as not worth the effort.

And Ford and other American auto makers consistently refuse to make right-drive vehicles. They also want Japan to completely stop making kei cars, what , are they nuts!? American automakers haven't been to Awaji, or Kyoto or any other place with old cow-path streets. Kei cars are about 80% of the cars on Awaji. I can't go to many places and park my car there, what are the locals supposed to do?

Right on Himajin!

Biegun said no one believed European auto exports to Japan would increase after a deal.

But I don't believe this is true. Ford and GM have always tried to see cars manufactured for the US, meaning oversized for Japan, and designed for cruising on highways. Great for Interstate travel, not so good for Inter-ku travel in Tokyo, and less good for rural roads. I can't think of a bigger "no brainer" than just trying to match the market. The laugh is that Ford and GM DO have the cars that the Japanese want, but they are the ones designed and built for the EU market. Not only do they drive well, but they are highly economical too. Ford has just begun to sell two models here no (Focus and Kuga) but has decided that they are "premium" models, and are priced to compete with BMW and Benz. Now guess what, they don't sell very well!!

Truth is, Japanese consumers like buying Japanese products. And for a reason. Also, Biegun is not going to gain anything with his rhetoric.

No Miso: Ford and GM have always tried to see cars manufactured for the US, meaning oversized for Japan, and designed for cruising on highways.

This argument doesn't fly.

My Toyota Crown - hardly a rare car on the roads - is easily comparable in size to anything that Ford or GM or Chrysler turn out. I've also owned a Land Cruiser 80 series that was certainly comparable in size to a similar vintage Chev suburban. They might not be the most practical if you live in a heavy urban area, but I had very few problems navigating Japan's roads with either - and I'm not the only one.

Poor reputation for quality, poor reputation for customer support and an almost complete lack of advertising/marketing to correct those impressions are the reasons no one is buying.

And Ford and other American auto makers consistently refuse to make right-drive vehicles.

That's not true. A GM representative in Tokyo told me it's about 50-50, and the 50% with LHD are sold to the Japanese motorists who request this feature. (It makes the vehicle look exotic and helps with inside passing, common here). And...so much for the "US cars don't cater to Japanese customers," huh?

Truth is, Japanese consumers like buying Japanese products. And for a reason.

Fine. Then don't engage in free trade with other nations. Sorry, it ain't a one-way street.

japan is interested in looking after Japan and who can blame them

Fine. Then don't engage in free trade with other nations.

hokkaidoguy

My Toyota Crown - hardly a rare car on the roads - is easily comparable in size to anything that Ford or GM or Chrysler turn out.

OK, so what is the equivalent on sale from Ford of your Crown?

Now compare that to 60% of what Japanese want, which is kei cars. They make so much more sense here. You are absolutely right to point out the reliability issues of US made Fords (don't know about other manufacturers stats) but their EU counterparts are leagues ahead, AND they produce cars people want to drive - look at the sales statistics.

and in particular in the case of Japan, there should be no mistake about it: these can be called free-trade negotiations, but the intention of the negotiating party with Europe is not to embrace the model of two-way trade.”

A world-class understatement. Japan could get away with this for decades when countries were desperate to get their companies even a small foot-hold in the country because of Japan's astronomical growth/recovery -- shooting to a place as the world's second largest economy. But now with an economy in over two decades of stagnation, deflation, terribly high corporate taxes, and legendary government restrictions/bureaucracy, the game has changed. But Japan's leaders are still reflecting the arrogance that the prosperity established there. And dis-mantling all those restrictions would take many, many years. Japan is between a rock and a hard place, and there aren't going to be any easy roads out.

So why macdonalds, starbucks, microsoft, boeing and not to mention that Aflac holds 75% of the Japanese market for medical insurance,and other U.S. companies have nothing to complain about huh? When the Japanese people, be not slave of Americans they dont feel satisfied..

The Japanese government has done everything possible for Americans but they are never satisfied always want more and more and more ..

I just want affordable decent cheese. Pleeeeeease!

Japanese oranges could sure use some outside competition

Yeah sure, Ford is a "great advocate of free trade"--except where their inferior products can't compete against better ones. Anybody who knows anything about cars would never buy an American car when they could buy a much better made, more reliable, less trouble free Japanese one. Before they start mouthing off about "unfair trade" Ford and the other American automakers should take a good, long look at their products and figure out why none of them ever manage to make the top echelon in consumer ratings. And maybe try to figure out why they used to have almost all of the North American market and their share has been shrinking for the last 40 years. And why so many of their former customers deserted them. Maybe they should even send someone to Japan to learn how to treat their customers with respect and after-market service.

JeffLee:

I agree. Japan is a lost cause. European carmakers and other globally savvy and successful players view this market simply as not worth the effort.

I think you might be in to something there.

Japan used to be seen as an important market (and still is to some extent) but since being too damn picky and sensitive, it might be considered not being worth the effort any more. Especially now that China is starting to buy more international goods. Perhaps it is true as you say - many companies just don't want to deal wiyh Japanese any more.

Good time for the Japanese to wake up and realize that the bubble burst some years ago. Champagne swinging Ginza days are gone.

Anybody who knows anything about cars would never buy an American car when they could buy a much better made, more reliable, less trouble free Japanese one.

That is, unless they wanted anything resembling good design. With some exemptions, Japanese cars look more boring than porridge.

Knox: contain your arrogance, the next lost cause could be either US or Europe.

Himajin,

What are you talking about? Awaji? Kyoto?

This has nothing to do with kei cars as they are merely shabbier quality cars with smaller engines. The size of those cars is unimportant. I see no problem for foreign makers to construct cars aptly sized for Japan's jokingly underdeveloped, narrow roads. Rather, it is probably not worth the effort due to domestic production encouragement.

Just looking at my everyday life: what US made product am I consuming? ....

Besides a few annual hamburgers, and China made computer, I see nothing.

No Miso:

Now compare that to 60% of what Japanese want, which is kei cars. They make so much more sense here.

The same way happoshu makes more sense here, right?

They only sense to people because they are cheaper. That's it. They are a subsidized part of the Japanese auto industry to make people buy more. Nothing else. If it weren't for the lower price, why would anyone want to ride in one of these tin cans?

Knox Harrington: Rather, it is probably not worth the effort due to domestic production encouragement.

Count the European cars on your drive to work tomorrow. Then count the number of European car ads you see on TV when you get home tomorrow night. Then count the number of European car dealerships within 50km of where you live.

European car makers have put in the effort - and they sell cars. The Big 3 haven't, and they don't - with the exception of Chrysler...thanks to Fiat.

And what are the non-tarriff barriers US automakers complain about? "Could you please lower your polution standards so we can sell our poluting cars in Japan?"

That's what South Korea did get the FTA with the US passed. The emissions standards were exempted for US made cars only, but not for the domestic and EU makers. And also, gas consumption taxes that South Korea put on cars with large engine displacements were abolished for US made cars only, but not for others. The US also wanted quotas put on American cars - gurantees that South Korea will import X number of cars per year, equal to the number of South Korean cars sold in the US. The South Korea refused on this demand, but the FTA deal went through anyway.

Despite all the advantages, and lower prices caused by the FTA, the US makers have seen their sales decline. This is despite the fact that the market share percentage of foreign cars sold in Korea has skyrocketed after the FTA's. It must be embarassing for Ford and Chrysler executives to see their car sales in Korea decline, yet Honda's and Toyota's made in the USA cars, increasing their sales volumes significantly. The German makers VW, BMW, Audi, Mini, are doing fantastic with sales volumes climbing by double digits every month, while French and Italian makers wracked with quality and after sales service problems are doing pretty bad.

The bottom line is this, if you have quality, and if you can differentiate your cars from others, and people want to have what you have in offer, they will buy them. Let's face it, in Asia, Ford, Chrysler, GM cars are not nearly as desirable brands like VW, Mini, Audi, Benz, and BMW.

@knox 1) happoshu is made by Japanese companies to get around the strict alcohol tax laws here - anyone can do it, but whether you would want to drink it or not is a different matter

2) Well you hit the nail on the head, just wonder if you realise why? Kei cars aren't actually subsidised, they qualify for lower taxes. Most regular cars are taxed at 30k per year for road tax, and kei cars are charged at 7k per year. No one is stopping any non Japanese manufacturer from making a kei car, there are no rules that would prohibit a foreign make making a kei car, and you have to admit, that in a world where car occupancy average is 1.2 people per car, it seems a reasonable effort. They are not subsidised as you suggest, they just make more sense.

Open,

I guess you don't carry a smart phone? Or frequent Amazon? Or even use the Internet, right?

It'd be better if you contained your ignorance. Try to avoid US products all you can. It's a lost cause.

American cars are designed to fail and become unrepairable after a few years. Japanese cars last. As a Canadian I learned this lesson by experience. My Ford, GM, and Chrysler cars were all junk by about 200,000 km. My Nissan pick-up went over 400,000 km before the frame rusted through with the salt on our winter roads. My 1990 Toyota 4 Runner is still running well at 380,000 km. I repair the body every spring by riveting sheet metal over the holes and covering with body filler and touch-up paint. I am now replacing the rusted brake lines for the second time. Unlike American cars, the motor and drive train on Japanese vehicles are indestructible! My next vehicle will be an electric hybrid. I would prefer an electric car with a flywheel to store braking energy, and no gas engine at all. Congratulations to Japan on your world class vehicles. May you trade them freely!

No Miso,

Kei cars are popular, no doubt because of lower taxes and lower price. While I agree with you that yankee car makers should put in the effort to analyze the Japanese market (if they want to sell more cars here) I don't believe for a second that would solve problem. Even if they made completely new models, they'd be subjected to some form of xenophobic treatment, instigated by the J-gov to essentially protect one of the (former?) golden calves of Japanese prosperity - the domestic car industry.

The Europeans might have done a better job than the Yanks, but they still sell a small percentage compared to local brands. And what about Korean cars? Are they even here?

Furthermore, your logic about kei cars being perfect for Japanese roads... Can you please explain the enormous amout of mini-vans (or whatever they are called) I see in Tokyo? Wellfire, Estima and the likes... They are definitely not small vehicles and considering most of them being used by one single driver, not very efficient at all.

Knox HarringtonMar. 17, 2013 - 10:56PM JST

JeffLee:

I agree. Japan is a lost cause. European carmakers and other globally savvy and successful players view this market simply as not worth the effort.

I think you might be in to something there.

Japan used to be seen as an important market (and still is to some extent) but since being too damn picky and sensitive, it might be considered not being worth the effort any more. Especially now that China is starting to buy more international goods. Perhaps it is true as you say - many companies just don't want to deal wiyh Japanese any more.

I think maybe you should get real. Japan is the third largest economy in the world, and the average Japanese consumer has much more buying power than the average Chinese. Japan is a good market for quality products--you only have to look at the success of companies like McDonald's, KFC or Apple or any quality apparrel makers, designer goods from Europe, etc. Some things don't go over so good, like X-Box, because the culture is different and they don't like American style video games. American and European cars will never go over big in Japan for a couple of reasons--one being that the American and European automakers refuse to adapt their models for the Japanese market, and the other that is they are simply not as good quality. Why bother building a good product when you can run to your government for a bailout when your sales drop and you are in danger of going broke? Please explain why 8 of the top 10 car models in the recent Consumer Reports (an American magazine) were Japanese, only 2 were European and none were American or Korean? Quality counts for Japanese, apparently not so much for arrogant Americans who have been satisfied with poor quality cars from the "big three" for many years.

"Free Trade" in Japan? That will be the day......

"Drive Your Dreams" yeah that's a good one because half the time you are in a car in Japan you are sitting in a massive traffic jam and there is plenty of time to daydream about how much you sincerely hate yourself!

For all of you Weeaboos connoisseurs who just love Yoshinoya "beef yakiniku bowls" guess what? That's Australian meat mates! Yeah, no worries.

Now that ALL of the food in Kanto is irradiated, there is an open window for yet even more food imports. But let's face it folks, the party is over. The ship is sinking faster now than ever before. Japan's debt went to four quadrillion yen!!! That's a thousand trillion dollars! If you were to count to that number and use one second for each number you count, it would take you 81 million years to finish the count. And today Japan spends 50 percent on debt service. Their rates cost them another 25 percent of revenue. And they want to inflate? Oh Oh Oh please! Mori put down the sake. Just a 2 percent rise in the long rates and THAT'S ALL FOLKS! （⌒▽⌒） 5.3 Laughing

And what about Korean cars? Are they even here?

No. Hyundai packed up and left in frustration a few years ago. It has better things to do than stick around "the poor man of Asia."

I think maybe you should get real. Japan is the third largest economy in the world,

And falling. Especially, its auto market, which is dropping like a stone. Japan's auto industry association predicts nothing but dwindling sales in the years ahead. Even Japanese makers are frustrated by their own domestic market. They need to ramp up their sales in more lucrative markets in foreign countries to survive.

Cheap kei-cars don't provide the margins that sedans do.

@knox

Even if they made completely new models, they'd be subjected to some form of xenophobic treatment, instigated by the J-gov to essentially protect one of the (former?) golden calves of Japanese prosperity - the domestic car industry.

That is partially true, but I don't think it is necessarily the government that drives nationalist feeling. The people do that themselves. Look to the UK for an example of that where they maintain the Vauxhall brand to keep sales there as high as possible. Can't honestly remember the last real Vauxhall, they are generally rebranded Opel's - even the badge changed shape so that the rebrand was as easy as possible, but as you state, the people love to buy domestic! That is curious now as the cars are only fractionally British, but it really didn't make sense back then British cars were absolute junk, but British bought them in droves. And that was despite the presence of vastly superior and better priced Japanese imports! In Japan, the locals make good cars, so getting a foothold is going to be difficult, and since there have been no real tax barriers to date, it is hard to see how TPP can help, or ANY rule tweaking other than making Japanese cars cost twice as much as foreign competition!

Can you please explain the enormous amout of mini-vans (or whatever they are called) I see in Tokyo? Wellfire, Estima and the likes... They are definitely not small vehicles and considering most of them being used by one single driver, not very efficient at all.

Yes I can. There is more than one market segment in Japan, as odd as that sounds. Even in the US, there are at least 2 (4 door sedan, and truck). Kei cars make up the largest, but even within that it is broken down into mini van, light truck, hatchback, and even sports car (!). As you pointed out, there is a huge people carrier business thriving too. These are simply people with more money, and use their money to buy the most practical vehicle possible per square metre of parking space. Not the most fuel efficient and certainly not shared effectively.

Everything changes.... look at Sony, Matsushita, Hitachi, Sanyo, and Sharp. Once they ruled... you would find one of those names in every American house. They're mostly gone now. I used to think American Cars were doomed but as I start to look around I'm seeing that U.S. car styling and technology is back on track. This story is about the unseen barriers the prevent foreign cars from dominating both Japan and S. Korea. If you don't think something is going on then answer me this. Why, when both Japanese cars and S. Korean cars, are selling well in the USA, why are Japanese cars not selling well in s. Korea or vice versa? Its the Barriers. Carefully crafted stealthy barriers that make it very difficult for foreign manufactures to compete.

JeffLee:No. Hyundai packed up and left in frustration a few years ago. It has better things to do than stick around "the poor man of Asia."

For decades the Japanese saw Hyundais as re-badged Mitsubishis - which they were, for the most part. When the partnership came to an end, and Hyundai started building its own cars, the Japanese marketplace was the only one in the world with that public perception to overcome.

The challenge was to erase the image of being a re-badged Mitsubishi and cultivate the image of a new, modern, successful designer and manufacturer in a marketplace where they no longer had the support of a domestic partner.

They responded to that challenge by doing nothing. No marketing, no dealership tie-ups, nothing. The result? It was such a PITA to even find a dealer that no one bothered. You can't buy what's not for sale. And because everyone was still under the impression that they were just re-badged Mitsubishis, that's exactly where their remaining potential customers went.

American cars are designed to fail and become unrepairable after a few years.

Jim -- HOGWASH. Please get up to date on reliability rankings. You are still stuck in the 90's.

Why, when both Japanese cars and S. Korean cars, are selling well in the USA, why are Japanese cars not selling well in s. Korea or vice versa?

It's not a vice versa situation. Korean sales of Toyotas -- including the high-end Lexus models -- gained 73 percent last year to 15,771 vehicles, making it the fourth-biggest foreign brand in the country, with 1.2 percent of the market. On the other hand, Hyundai failed because it tried to sell the Sonata in a market where larger vehicles don't sell well. Sales of the Toyota Camry and Honda Accord average around 300,000-400,000 a year in the United States, but no more than 12,000 in the Japanese market.

American cars are designed to fail and become unrepairable after a few years.

Absolutely hilarious. For every restored vintage Japanese car on the world's roads, there are about 10,000 restored American cars. My 1994 Mustang goes like gang busters with no restoration yet, and whenever it needs a new switch or trim feature, I can get replacements quickly off the Net for a few dollars.

Much of this is true, except one reason why foreign cars don't sell widely inn Japan is that Japanese cars are cheaper (even without any import tariffs) and better.

Himajin And Ford and other American auto makers consistently refuse to make right-drive vehicles. They also want Japan to completely stop making kei cars, what , are they nuts!?

Are you sure? Ford makes cars for the UK and South Africa and Australia etc. As do GM and Chrysler......

JeffLee

Absolutely hilarious. For every restored vintage Japanese car on the world's roads, there are about 10,000 restored American cars.

Probably true but you'll have to remember that there were more American cars in the market during the 70's prior. Another point would be that cars during those years were more mechanical after the 80's more and more electronic components crept in making it difficult for the average mechanic to maintain after ex. a chip or other IC components breaks down.

Himajin,

What are you talking about? Awaji? Kyoto?

This has nothing to do with kei cars as they are merely shabbier quality cars with smaller engines.

About 8 months ago American auto makers were talking about either-

a. cessation of kei car production

or

b. elimination of the lower tax/shaken prices on keis

as a condition of Japan joining trade negotiations. American auto makers evidently think they could get a foot in the door if this market was eliminated.

Are you sure? Ford makes cars for the UK and South Africa and Australia etc. As do GM and Chrysler......

Locally made, I'd be willing to bet. American cars imported to Japan over decades past were not available with right-hand drive. They may be now, but I stopped looking at American cars a long time ago. Too little, too late.

While both have reservations about Japan, American and European car-makers don't have a problem with an US-EU free-trade deal.

Why is that...................?

@lostrune2

Because both have manufacturing facilities in each others markets. EU really do not see cars made in American as a threat and the American market is already saturated with European made luxury cars.

Jeff, I don't have a "restored" vintage Japanese vehicle. I have a 1990 Toyota 4 Runner (the original first production hardbody which is the 2 door model) V6. I haven't restored it because aside from repairing corrosion due to salt on the roads in winter, and routine maintainance items like brakes, belts, exhaust system, battery, spark plugs, alternator, etc. I haven't had any problems with the motor or drive train. And I have driven it the distance from Earth to the Moon! I will admit to making some creative modifications, including a unique welded moose & deer bumper on the front. For the past 8 years I have used it to haul 2000 pound trailer loads of building materials every summer over 1500 km of wilderness mountain roads for a home I am building on the north shore of Lake Superior. By contrast my Ford truck blew it's engine, my Chevrolet station wagon blew it's engine, my VW Beatle blew it's engine, and my Chrysler van developed irreparable problems with its ABS brake system just before the transmission was due to blow. I admit that the occasional American vehicle does last, but that is the exception. My Nissan 4 cylinder truck lasted over 400,000 km. And my son's 1996 Toyota Tercel still runs beautifully. How many miles on your Mustang, and do you drive it on salted roads in winter?

hokkaidoguyMar. 17, 2013 - 04:43PM JST

Can anyone enlighten me on what the US auto manufacturers actually want from the Japanese government in these negotiations?

Great question hokkaidoguy! I'm not quite sure, and I don't even know if Biegun himself knows either! Japanese automakers suffered miserably in the 70's when trying to sell their cars in the US. Then they did their homework and got over these 'hidden barriers' that everyone claims Japan has now, and are quite successful in the US.

Why don't American carmakers clarify what these 'hidden barriers' are? Are they afraid of something?

btw, if this free trade deals goes through, I wonder if the big 3 will start importing even more cheaply made vehicles from Mexico than they already do now?

I thought only America got itself into one-way trade deals. Wither Europe...