Japanese carmaker rolls up sleeves to crack US market
A seventh Japanese import has just joined the fight for the US car-buyer's dollar. Despite rocketing Japanese car sales in the United States and Western Europe over the past few years, American Isuzu Motors (AIM) adds its name to six other Japanese nameplates in selling cars in the US.
The company now is marketing cars and light trucks in California and on April 1 will expand to another 21 states. Distribution probably will go nationwide over the next few years. Projected sales this year are 20,000 vehicles -- 80 percent of them diesels -- and 50,000 in 1982.
Isuzu thus becomes the sixth independent importer of Japanese-built vehicles in the US joining Toyota, Nissan (Datsun), Honda, Toyo Kogyo (Mazda), and Subaru. Mitsubishi markets its cars through Chrysler dealers.
AIM's planned expansion couldn't happen at a worse time -- or better time -- depending on who has the floor.
To American Isuzu Motors, the market is ripe for a new car.
Jack Reilly, general manager of AIM, sees it this way: "The economy's in the pits and the political atmosphere is very anti-import. All of the major hurdles are right here, right now. We probably won't ever have to face them again."
Yet the federal government soon may press the Japanese to voluntarily restrict auto exports till the domestic industry can compete on more equal terms with the imports.
Many shy away from a mandatory cutback in imports because of its potential impact on world trade as well as its antitrust implications in the US. But if the US successfully prevails on the Japanese to ease the pressure over the next couple years, it would apply to Isuzu as well as to Toyota, Nissan, Honda, and the rest.
Japanese automakers have stunned Detroit by repeatedly introducing high-quality, high-mileage, up-to-date vehicles that are competitively priced and well styled to boot. In response, the domestic carmakers have been scurrying for the last few years to resize and modernize their car fleets, at huge cost, and make them more competitive with the imports.
General Motors, ford, Chrysler, and American Motors will spend up to $80 billion by 1985 to turn the domestic auto industry around. While automakers have brought a number of modern-era vehicles on stream to meet the foreign onslaught, the feeling is that there are not enough of the GM X-cars, Chrysler K-cars, ford Escort/Lynx, and others, to do the job.
Simply, the importers have a long head start. Thus, many car buyers are in the import corner and would buy an import no matter what comes off the line in Detroit.
Also, there is the matter of quality. to some it is more an issue of perceivedm quality than actualm quality. In any event, millions of US car buyers are fully convinced that the importers, notably the Japanese, build better cars with fewer breakdowns, superior paint, and better fit. Whether true or not, the domestic companies are fighting a tough battle to win back the car shopper.
This isn't the first time Isuzu vehicles have been sold in the US. As its West German-built Opel rose sharply in price, GM began importing Isuzu-built Opels at a substantially lower price. GM has a 15 percent stake in the Japanese auto manufacturer.
Interestingly, Buick at first sold the car under the name, "Opel by Isuzu," but sales were few. Later the GM division dropped the Isuzu label on the car and sales went up. GM stopped importing the car in 1979.
Aware of the identification problem, AIM is planning a $7 million ad campaign to familiarize the US public with the name tag.
The new product line includes seven I-Mark coupe and sedan models and six P'up minitrucks. Prices range from just under $6,000 to almost $8,000.
While the company will offer a diesel option in the vehicles, it cannot be sold in California till it passes the California emissions tests that may keep it off the market till fall.
AIM will slowly expand its availability to other markets over the next year or two. So far it has more than 200 dealers signed up to market the car, more than half of whom are dualed with a GM brand. The current goal is 600 dealers over the next several years.
The company expects to sell 20,000 cars this year with 80 percent of them diesels. By 1983, the company projects 50,000 sales. In 1980, some 1.9 million Japanese vehicles were sold in the US, an all-time high.
GM, through a deal with its Japanese affiliate, is offering the Isuzu diesel engine in its subcompact Chevrolet Chevette, but few cars will be available till next fall when more engines reach the US. Isuzu expects to introduce a sporty coupe in the US by 1983. Then in 1984, it will offer a turbocharged diesel engine in the car.
Meanwhile, John Z. DeLorean, erstwhile GM executive who now is building a sports car in Northern ireland, soon will ship his first cars to the US for sale in California. The DeLorean automobile is priced at about $25,000, far higher than the anticipated price when the program was in its infancy.
import sales in US -- in units Make 1979 1980 %change Toyota 507,816 582,204 14.6 Datsun 472,252 516,890 9.5 Honda 353,291 375,388 6.3 Mazda 156,535 161,169 3.0 Subaru 127,871 142,968 11.8 VW 125,072 90,923 -27.3 Fiesta 78,109 68,595 -12.2 Volvo 56,027 56,429 0.7$ QArrow 48,860 55,474 13.5