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What do you think are the main reasons why U.S. car sales are so low in Japan?

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Probably the same reason you don't see many sales of British, German, Italian, French, Swedish or Korean cars either. The market in Japan is tough to enter and total sales are in decline and unlikely to recover. On top of that at least a third of existing car sales are for the mini-type 660 cc vehicles that offer little profit - hence little motivation to spend the money required to build distribution. The real goal of foreign makers has been to open up the Japanese market for car parts - that is where the real money is.

4 ( +5 / -1 )

Politically motivated tariffs and trade barriers. This is the main reason U.S. lawmakers DO NOT want Japan to join the TPP. They'll just clutter up the negotiations with protectionist demands.

-3 ( +2 / -6 )

Because it's so hard to get a foreign made car registered in Japan...especially if that car is the first one in Japan.

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They are difficult to import and register AND many people in Japan buy local...if the local dealer does not have the car people are unwilling to go through the time and hassle.

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Look at a parking lot for GM or Ford workers and ask what the main reason why U.S. car sales are so low among the people who build them. The average age of an automobile in the United States is now at an all-time record of 10.8 years. 

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All of you have very good reasons, but there is one do not see they are just too big. Most of japanese streets (at least the ones that I lived on) were small. Of course that was back in the mid 60's.

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U.S. cars had to shrink since all of the major manufactures went broke in 2008.Congressmen told the Presidents of the auto companies that if they were being paid a $1.00 an hour they were being overpaid because they were so far behind "the curve" on mileage, size, safety and affordability? They just wanted to keep on building large autos that could keep on bringing in BIG PROFITS with no respect to the sky rocketing oil prices. And very little interest in autos powered by alternative clean energy. But President Obama is getting around to cutting oil subsidies finally! Thank You JT

-1 ( +0 / -1 )

suzu1 nailed it!

Gajinfo there is NO DUTY on imported cars, although there is 5% import consumption tax, but that applies to all imports.

The profit margins for average cars arent a lot so once you have gone through all the crap in Jpn once the car is landed it wud be hard to sell & even harder to make money, thats how the J-govt & J-car makers keep most run of the mill competition out, barrier to entry is simply not worth it, even more so now that the population is in decline & car ownership is also in decline, its a double wammy & now even J-companies are feeling it & its going to hurt a lot more each year here on in for most makers

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US cars are more expensive than Japanese cars. Price a Cadillac, I dare you. A Cadillac in Japan costs 2x as much as it does in the US. All the tariffs and taxes makes it undesirable to buy American. Japan is not a free trade country.

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Husain

THERE IS NO DUTY when importing cars to Japan, now having said that, that doesnt mean you can just start driving around once your car has cleared customs at the port or airport, but THERE IS NO DUTY for importing cars

0 ( +1 / -0 )

If Japanese people really wanted to buy American cars they would. Japanese cars are just so user friendly and reliable. I used to be in to Ameican cars a lot in my mechanic and hot rod days, but once I started driving Japanese cars, I would not change. If BMW, Mercedes, Peugot, Mini, Vokswagen can sell their cars in Japan then there is no reason why they can't sell USA cars as long as there is a market for them. No point in trying to sell left hand drive American cars in Japan. There is no closed market for USA cars as USA dealers would have you believe.

-3 ( +0 / -3 )

@GW

Then why does an American car costs twice as much in Japan? Go price any American car and compare it with its price in its homeland. There is almost a 100% markup. Why?

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Quality. Japanese cars are the best in the world. There's no need to buy imports.

And patriotism. We want our people to keep their jobs.

-1 ( +3 / -4 )

The answer to this question mainly lies in the reason there are almost no Hyundais in Japan — and likewise almost no Toyotas in South Korea.

Countries that practice relatively free international trade have plenty of both Hyundais and Toyotas on their streets, while countries that don't practice free trade simply don't.

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Hussain

While I have imported cars & parts over the years it isnt reallyb my thing but I can think of these things that will add to the cost

1 cars have to be bought 2 shipped to Japan 3 clearance, airport handing terminal chgs etc 4 import consumption tax of 5% usually based on CIF value 5 local trucking, cud be multiple trucks/trips inolved

and then you got all the compliance paperwork stuff that they fleece you on

AND then someone will want to sell it for profit

That isnt everything I am sure but shud give you an idea of some of whats involved

throw in low margins & yr average car likely isnt worth the bother.

The European stuff people trot out as examples are mostly luxury cars(with a few lower priced models) with higher margins & therefore is a market for them.

To be sure Ford & GM etc cud have put more effort into this years ago but the profit just aint worth it n & THATS exactly what the locals wanted to do, that & throw in all the usual propaganda & ford GM etc never had a chance to begin with

0 ( +0 / -0 )

The steering wheels are on the wrong side, that's why you see even less American cars in Britain than in Japan -- they are dangerous, and in the UK face a huge (100%?) insurance load

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@GW

Gajinfo there is NO DUTY on imported cars, although there is 5% import consumption tax, but that applies to all imports.

That may be the case, but higher registration costs act as de facto tariffs. Surely US badged Chinese imports would be much cheaper to sell. That being said, Buffett noted the importance of competative advantage that act as barriers to entry into a particular market - Japanese companies have worked hard builing their brands for an extended period of time in a way that US car manufacturers have not - following a Gillette model where you pay a lower initial investment for a product, only to pay for replacements, and other higher on road costs.

@j4p4nFTW

Quality. Japanese cars are the best in the world. There's no need to buy imports. And patriotism. We want our people to keep their jobs.

Yes, patriotism...so why are the factories full of Brazilians?

1 ( +1 / -0 )

Yes, patriotism...so why are the factories full of Brazilians?

Some one has to wear the blue collar and do the actual work.

-2 ( +0 / -2 )

If I were to guess, it would be because the American cars are too g*dd#@n big. In between SUVs, Pickups, "Crossovers" and the luxury sedans, where the heck would you find a place to park in Japan? The only ones that would fit are re-branded models of Japanese cars.

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FadamorFeb. 14, 2012 - 05:44AM JST If I were to guess, it would be because the American cars are too g*dd#@n big.

Then teill me why Mazda 3 sells 200,000+ per year, but Ford Focus sells less less than 100? They have same platform, same or close to identical engine & transmission, and same gas milage.

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j4p4nFTWFeb. 13, 2012 - 07:31PM JST Quality. Japanese cars are the best in the world. There's no need to buy imports. And patriotism. We want our people to keep their jobs.

Japanese cars are most dangerous on the hi-speed freeway accidents. They are made from recycled beer cans. U.S. really don't need any Japanese cars. There is no need to buy imports. We want our people to keep their job.

-3 ( +0 / -3 )

Steering wheel is definitely a disadvantage.

Also for these skinny roads, if you do not have mirrors that retract with a touch of a button, you would have to replace mirrors weekly.

Also American car doors are made to swing open wide as most Americans are over weight or obese. They cannot get in and out of Japanese cars. Dent the seats too like on an air plane.

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That may be the case, but higher registration costs act as de facto tariffs

andrew, I did mention that in my post if you had read a little further on

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Maybe because there aren't that many desirable US cars? There are any number of good foreign cars (eg Porsche, BMW, Merc etc) here, so not due to protectionism and the like.

-2 ( +0 / -2 )

Then teill me why Mazda 3 sells 200,000+ per year, but Ford Focus sells less less than 100? They have same platform, same or close to identical engine & transmission, and same gas milage.

sfjp330, come on, why do you repeat that nonsense again? It's not long ago that we discussed the reasons, none of which has anything to do with protectionism (or quality, as others claim).

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I knew a Japanese lady who worked at Ford, maybe I think she still does. She is a career type woman in her 40s single-she cant drive and is so patriotic of Japan, yk the type that wants to remind you it's your turn to write, or send a present or visit, as if that is every Japanese persons belief on how to have a relationship-maybe Ford need to rethink the type of staff they hire in Japan. I want a big ole American car, thank you; if the trucks can drive my road well Im sure I can handle a itty bitty car.

0 ( +1 / -1 )

It is a combination of many reasons that US cars don't sell well in Japan. The prevaling unwillingness of US makers to provide localized versions of their cars (you can see the same in other markets). The lack of line-up in the smaller car segment, which is the dominant market in Japan. Logistics costs which have to be amortized over only a small number of cars, thus making them unproportionally expensive. The lack of a wide dealership or repair shop network. A tainted image due to a long period of quality problems. A relatively small, but very competitive market, which doesn't seem to be attractive enough to US makers to spend major efforts to overcome the above mentioned issues.

The reasons are not import duties (0%) or non-tariff barriers. The latter only exist in the fantasies of populist politicians. Again, I invite anybody to prove me wrong by concrete examples.

0 ( +0 / -0 )

American cars have a terrible reputation not only here but in other countries around the world, untill they fix this problem american cars will not be popular here.

Reliability, build quality, economy, size, style, image, ease of and cost of maintenance are all areas that need to be addressed.

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What do you think are the main reasons why U.S. car sales are so low in Japan?

Fuel efficiency.

And before sfjp330 and others start comparing U.S. made Japanese vehicles, compare the Japan made fuel efficiency vehicles to that of the U.S. counter parts (like Chevy Sonic). The difference is night and day.

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U.S. automakers does not regard the Japanese market as worth much of an effort. The market has an aging population, and automobile ownership is sometimes a difficult proposition Japan. Not to mention the fact that it’s also the home turf of some of the most competitive automakers in the world like Toyota and Honda.

The Big Three cant be solely blamed for their failure to sell in Japan, of course. Impediments to imports remain in Japan. Up to about ten years ago, J-goverment required imported cars to be rigorously inspected before they could be sold. Such inspections could take six months. And Japanese automakers, which have a financial interest in virtually all of the countrys auto dealerships, have until recently refused to offer American cars for sale. In the past, taxes, tariffs and other hindrances could double the price of an imported car. In the mid 90's, A $15,000 Mustang sold for $30,000 in Tokyo, Japan. The history of fair export trade to Japan did not exist during 80's to early 2000's. U.S. should place 25 percent tariff on every Japanese cars exported to U.S.

0 ( +0 / -0 )

sfjp330, can you come up with something new which is not outdated since a long time?

Up to about ten years ago, J-goverment required imported cars to be rigorously inspected before they could be sold. Such inspections could take six months.

That was more like until 20 years ago, wasn't it?

And Japanese automakers, which have a financial interest in virtually all of the countrys auto dealerships, have until recently refused to offer American cars for sale.

Couldn't you come up with something more ridiculous? The proponents of free trade asking the state to force competitors to sell their products?

In the mid 90's, A $15,000 Mustang sold for $30,000 in Tokyo, Japan.

You can still find a similar ratio for some cars today. The reason is not trade barriers, but high distribution cost relative to the number of cars sold. And high markups.

0 ( +0 / -0 )

gonemad Feb. 15, 2012 - 08:51AM JST. Couldn't you come up with something more ridiculous? The proponents of free trade asking the state to force competitors to sell their products?

Ridiculous? You have alot to learn. If you didn't know, there are many dealerships in U.S. carry multiple manufacturered cars for sale. Even in Europe, since 2003, the EU Block Exemption Regulation law made Europe the most liberal car market in the world. It allowed any EU dealer to sell any car, and allowed any workshop to perform warranty repairs on your car. The supermarkets selling cars had been successful offering big multibrand franchises. Many have 3 to 5 brands under one roof. This allowed dealers to put logos up, and they could sell and service the cars. If automaker can’t control dealers anymore, they will create their own distribution channels. Of couse, it doesn't happen in Japan.

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Extreme lack of US brand dealerships coupled with exorbitant price tags. Not to mention that most are impractical for Japanese roads. Imagine getting a Hummer into a street built with k-cars in mind.

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sfjp330, even in the US or Europe you cannot force dealers to sell other maker's cars. That's why your proposal is ridiculous - at least in the way how I understand what you wrote. But actually you raised an interesting point. Is it true that almost all Japanese car dealers belong to manufacturers or that manufacturers have at least a financial stake in them? I tried to find something about it, but didn't come up with anything useful. Could you point me to your source?

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GW and Hussein, There is a 予備検査(yobiken) before 車検shaken. That explains the exorbitant price difference.

0 ( +0 / -0 )

Free Trade Deal ( Effective this upcoming March 15th) between S Korea and USA could lead to surge of demand for U.S.A. autos in Korean auto market overall..

0 ( +0 / -0 )

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