US Cars Add Right-Hand Drive To Increase Sales in Japan
IT'S like seeing someone wearing bell-bottom jeans or catching a clip of Sonny Bono in a spangly outfit. There is something eerily familiar, something reminiscent of the 1970s, about the way the Ford Motor Company is selling its imports in Japan.
The Fords are priced slightly lower than competing Japanese cars. Sales people, working hard to counter American cars' reputation for poor quality, stress distinctive features not found in domestic automobiles. Ford and other United States carmakers tout their new responsiveness to their foreign customers.
It's the same approach that Japan's big automobile companies used to pitch their products to American consumers in the early 1970s, back when the Toyota Corolla was named ``Lemon of the Year.'' Ford even pushes the better fuel economy of some of its models.
But all this is no accident.
Konen Suzuki, a former Toyota Motor Corporation executive who helped Toyota escape its cheap-car image and begin the Japanese drive toward huge US sales, has been president of Ford's Japanese subsidiary since February 1991.
Can he beat Japan's carmakers at their own game and sell enough Fords in Japan so the company won't have to measure its market share here in a fraction of a percentage point?
Self-confidence is one of Mr. Suzuki's strong suits. ``The guy who pioneered the US market is now on the other side,'' he says.
Last Thursday, in a vast banquet room in one of Tokyo's best hotels, Suzuki proudly introduced Ford's answer to a long-standing criticism of US car companies operating in Japan - that they don't realize that the Japanese drive on the left and want cars with steering wheels on the right-hand side of the car.
Off came the wraps on the first imported, right-hand-drive passenger cars from an American manufacturer in recent times: Ford's Mondeo, a European-built sedan and wagon, and the sportier, US-built Probe. The company also reintroduced a revamped hatchback called a Laser, which is made in Japan.
But Fords have been doing well here even without right-hand-drive imported models, as have other imports. Figures released last week show that Japanese consumers bought 21,579 imported cars last month, a 48 percent increase over May 1993. Ford sold 847 of those vehicles, almost three times as many imports as the company sold a year earlier.
Increasing Ford sales
The numbers are small, but the incline on the sales chart looks good. In 1992, Ford sold 3,362 imports in Japan. Last year, the figure rose to 5,407. This year, the company says it will sell 15,000.
The gains come as the automobile market here has shrunk along with the economy; in the fiscal year that ended March 31, the Japanese makers' domestic sales declined for the third year in a row.
Nonetheless, Suzuki says that by the year 2,000, Ford will sell 200,000 cars, including imports and automobiles made here under the Ford label. Last year, 4,807,891 cars were sold in Japan; Suzuki's goal is 5 percent of that market.
Chrysler Corporation was the first of the Big Three to offer a right-hand-drive import - the popular Jeep Cherokee - in Japan. But Ford is the first to try to build a brand-name distribution system here.
The company co-owns, with Mazda Motor Corporation, a network of 288 dealerships that until recently have gone under the name ``Autorama.'' They sell Ford imports and Ford-brand automobiles made by Mazda. Last month, the dealers started taking down the Autorama signs and replacing them with ones that say: ``Ford.''
There is an element of da vu in this switch, since both Ford and General Motors had a large distribution network in this country - and shared 90 percent of the automobile market - before pre-World War II protectionism forced the US automakers out. At that time, the Ford signs came down, and ones with the name of a newer entrant into the Japanese car market, Toyota, went up in their place.
Both Chrysler and Ford have benefited from cutting their prices here. Partly, that is a result of the yen's rise against the dollar, which makes imports cheaper, but partly, it is an attempt to reposition the US cars.
Suzuki wants Ford to break out of the niche that most imports here inhabit: the high-status, high-priced luxury car.
``Our pricing policy is to compete with domestic vehicles,'' he says. The three-liter Taurus GL wagon, for instance, has a list price here of 3.31 million yen ($31,000), compared with 3.4 million yen for a similarly sized Toyota Scepter, a reverse import assembled in Kentucky.
Meanwhile, the GL wagon lists in the United States for about $20,500, a disparity that raises eyebrows.
But a Ford spokesman in the US says comparing the Japanese price tag with the US sticker is like comparing ``an apple and a cow.'' International public affairs manager Kenneth Brown says the Japanese price for Ford cars is determined according to the Japanese market.
Pricing in Japan
At least some of the difference is explained by the costs of shipping and retrofitting the cars to suit Japanese specifications, but the company refuses to detail its pricing structures.
Many American products cost much more here than they do at home. Take the Wall Street Journal, for example. On the street in New York, it costs 75 cents. Here, the Asian edition of the paper, printed in Tokyo, costs 500 yen, or almost $5.
In Japan, Ford's plan is to create a more middle-class appeal for its cars, but the existing distribution network may pose some problems.
One struggling Autorama dealer in a western Tokyo suburb, for instance, is surrounded by Maserati, BMW, and Audi/Volvo dealerships - hardly a neighborhood where bargain-hunting salarymen would go to look for value. The dealership's manager says he sells just eight cars a month, a number that Suzuki concedes is not profitable.
But Suzuki says the combination of attractive price and an emphasis on standard safety features - such as air bags and antilock brakes - and the American cars' comfort and ease of handling will bring success.
While there is no denying that the company's recent numbers have been impressive, one analyst says there is no guarantee that Ford can translate success in niche markets - for wagons, sports cars, and recreational vehicles - into high-volume sales in bigger markets dominated by domestic manufacturers.
``Whether US imports grow rapidly or moderately,'' says Takahiro Fujimoto, an economics professor at the University of Tokyo who has studied the automobile industry, ``they will start with occupying niche segments in Japan where [some] US models demonstrate distinctiveness and attractiveness to some Japanese customers.
``Some of them may become major players evolving from the niche products over time, but this will be the next step,'' he adds.
r Monitor staffers Shelley Donald Coolidge in Boston and Miharu Hasegawa in Tokyo contributed to this report.