Japanese automotive market opens up for business
The Japanese car industry is often said to be virtually closed to foreign manufacturers due to unfair trade regulations and customs restrictions. And the corresponding figures seem to support this claim. With sales of more than 5 million vehicles in 2018, Japan is the world’s third largest market for passenger cars weighing less than 3.5 tons. Nevertheless, Ford has withdrawn from Japan in 2018 and GM has hardly sold any vehicles there. In addition, domestic brands have a market share of 94 percent.
According to the study “A new Automotive World report on Japan’s new vehicle market”, GM with all its brands sold only 1,400 cars in Japan in 2018. Author Jonathan Storey also said: “It seems that the Japanese market is closed to foreign car manufacturers, but the reality is much more differentiated and there are a number of regulations to consider, which are explained in the study”. Another study, “Japan’s new vehicle market: prospects to 2023”, points to a changing market in the passenger and commercial vehicle sector. Manufacturers of passenger vehicles will have to adapt to a changed taxation system, while a downward trend is feared for commercial vehicles, despite the current tenth consecutive year of growth in this segment.
Given all the superficial and obvious difficulties, it is not surprising that the American Automobile Association and the Trump government accuse Japan of unfair conditions towards foreign car manufacturers. Yet Ford and GM have long had problems in the Japanese market. Reasons for this are the high market share of so-called kei cars (micro cars), a segment in which foreign manufacturers cannot compete. Moreover, with nine local car brands, there is already fierce competition on the market. Many of the vehicles offered by US manufacturers were inadequately converted for left-hand traffic, and the quality of the foreign vehicles was in the past worse than that of the Japanese competition. Probably as one of the few western car brands, Jeep from FCA could report an increase. Its sales figures have risen steadily in recent years to 11,400 vehicles in 2018 and further growth of 22 percent in the first nine months of 2019.
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