January 27, 2017 2:30 am JST

Japan's robust auto imports counter claims of closed market

German cars on the rise, while US sales drag

TAKEMI NAKAGAWA, Nikkei staff writer

The upgraded Audi A3, on sale in Japan now.

TOKYO -- Foreign vehicles now hold a record share of the Japanese auto market even as U.S. President Donald Trump assails what he sees as unfair access hurdles, a sign that the struggles of some car companies have more to do with appeal than legal barriers.

Audi Japan unveiled Thursday a revamped version of the German automaker's best-selling A3 compact line, now on sale at dealers nationwide. Driver assistance features come standard on the new models, while prices at the bottom end of the line have been trimmed 100,000 yen ($875) to less than 3 million yen. Audi sold 28,502 vehicles in Japan in 2016, double the figure from a decade ago.

"We will introduce 19 models this year, and aim to grow sales 10%, topping 30,000 vehicles," Audi Japan President Toru Saito said. The company is planning fully redesigned versions of existing lines, as well as a new compact sport utility vehicle.

"We're going to put at least five new models on sale this year," said Kintaro Ueno, president of Mercedes-Benz Japan, the country's leading seller of imported cars two years running. BMW, meanwhile, cracked 50,000 vehicles sold in Japan last year, squaring off against Toyota Motor's luxury Lexus brand. The German set continues to pour investment into the Japanese market, creating large-scale dealerships even outside major cities.

Growing interest

Foreign automakers sold 295,114 vehicles in Japan last year, up 3.4% from 2015, according to the Japan Automobile Importers Association. Foreign imports' share of all registered vehicles rose to 9.1%.

But American cars have not shared in this growth. Ford Motor pulled out of the Japanese market in 2016. General Motors sells only around 1,300 vehicles a year here. U.S. automakers accounted for more than 30% of Japan's vehicle imports in 1995, but last year that figure was around 5%.

Even hot-selling European makers have complaints about the market, one popular target being Japan's more favorable tax treatment for minivehicles known as kei cars. Germany, which unlike the U.S. boasts strong small-car offerings and advanced environmental technologies, has repeatedly sought redress through channels such as Japan's economic partnership agreement with the European Union.

Japan levies no tariff on auto imports. But hurdles such as unique fuel economy standards pose a challenge for foreign players, according to the JAIA, which is calling for a review of Japan's technological and environmental standards.

Know your audience

Trump's administration has recently made much of the fact that Japanese automakers control more than 30% of the American market while U.S. automakers have a scanty presence in Japan. Trump himself has claimed this country makes it "impossible" to sell American cars.

Yet Japanese manufacturers have met the demands of the American market and bolstered U.S. production accordingly. Their American counterparts, meanwhile, have pulled away from the Japanese market, skipping the annual Tokyo Motor Show since 2009, for example.

"There are many automakers in Japan, and competition here is fierce -- if you can't come up with attractive offerings, you won't make it," Audi's Saito said. It goes without saying that U.S. makers need to polish their cars' appeal. But Japan's government and business leaders also need to assure the world that this country's auto-market policies are just, and that Japan is open for business to all who can attract buyers.

Toyota Motor Corp.

Japan

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