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Reasons Why US Car Manufacturers are Unable to Get Strong Foothold in Japan

The US market is facing difficulties and for some time now. Their automobile makers cannot get their car units manufactured in Japan. It is often said that it’s due to the Japan’s stringent policies which prevent outsiders from initiating their business in the region.

In Japan, Japanese automobile manufacturers make up about 90% of the market (no surprise there). But why is it so? Because in Japan customers and dealers have very cordial ties between one another which others and in particular US has difficulty achieving.

Why is it such a big deal for the US? For the most part it is obvious because Japan ranks third in car manufacturing and yet the leader in the industry is unable to make cars where the demand is most for new cars since Japanese people are change lovers and don’t stick around with any car for more than 2-3 years.

An insight into this revealed that West is faced with problems such as lack of connection between customers and dealerships which Japan very well understands. How do they achieve this standard? Japanese vendors allow their users to take the demo drive and that is how they can experience the ride; gauging different aspects of the car.

Another study showed that Japanese dealers start to build ties or relationship building exercise from the time the customer is seeking to purchase a Japanese car auction house car and has not yet made a decision as to which car to settle for. As we stated, free demos are provided in addition to free car washes, insurance matters and what not!

Also, simply dropping an occasional “hi” or “hello” to a customer goes a long way. The customers feel valued and they would want to deal with you again. That is the hospitality and courtesy which the Japanese audience is accustomed to. If they don’t get it from someone how can they trust them or let alone buy cars from them. That is how their society is conditioned.

The story is no different on the US soil either. Around 39% of the market share is owned by Japanese manufacturers compared to 45% by few American manufacturers namely, Ford and GM. This has led to a trade imbalance between the two countries.

Even the current president of the US, Donald Trump has been quoted as saying that Japanese have made the car sales over there. Americans argue that the Japanese are strict with their regulations for selling of cars and thus have incorporated tougher inspection of foreign made vehicles.

That is okay but the problem lies with Americans as well. They are not willing to invest their time and energy in the dealer network which is why they are lagging behind in the area under review which is where the Japanese automobile makers take the cake.

Import tariff is another factor which discourages the use or purchase of American vehicles. See, Japan impose no tariffs or in other words, charges zero import tariff. As opposed to this the US or EU for that matter impose 2.5% and 10% in tariff, respectively.

Couple with the above point and their investment in the dealer network they would have been able to achieve a breakthrough in Japan. Japanese also have the edge because they provide their customers with maintenance such as routine tuning and leaving their JU Auction House Car at their doorsteps.

To sum up, in Japan to be able to gain a strong foothold in terms of selling cars, it has more to do with hospitality than marketing tactics. Now you know the BIG why.

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