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2013-11-24 10:06

GIVING IT LEGS: Models attract extra attention a racing version of Subaru's BRZ sports car - sister to the Toyota 86 - at the 2013 Tokyo auto show which has 177 exhibitors though some foreign brands are staying away because of tiny sales in th

Patrice Novotny

Despite years of wrangling and market protection promises imported cars are still rare on Japanese city streets. PATRICE NOVOTNY was at the Tokyo auto show to find out why...

TOKYO, Japan - Spotting a foreign car on Japanese streets is a rare sight - save for the odd luxury brand such as Ferrari or Jaguar - and it's a point that was underscored at the 2013 Tokyo auto show this week.

It was the third time major US automakers, including General Motors and Ford, had  skipped the show, which is held every two years and which opened on Wednesday (Nov 20). .

Critics say their puny presence in the island nation gives them little incentive to spend time and money trying to crack the world's third-largest auto market. While Japanese brands such as Toyota and Nissan enjoy huge success in China and the US (the world's top two auto markets) foreign names such as Renault, Peugeot-Citroen and their South Korean rivals accounted for only 4.5% of the 5.37-million vehicles sold in Japan through 2012.


Some critics pin the imbalance on non-tariff barriers which, they say, effectively shut foreign automakers out of the market - a key issue in ongoing free-trade talks. Others counter that most foreign brands offer few models and have failed to come up with cars that Japanese drivers want to buy.

Among the exceptions are Mercedes-Benz, BMW, VW and Volvo but even their sales are a tiny fraction of the market.

Light vehicles known as "kei" cars which have small engines of 660cc or less account for about one-third of sales in Japan, a category almost non-existent among US and European manufacturers.

Frederic Bourene, head of Japanese marketing for Renault, chalked up the challenge to the dominance of Japan's domestic manufacturers with their well-established supply chains and thousands of dealers.


"The Japanese market is highly competitive," Bourene told AFP on the sidelines of the show. "There are eight domestic manufacturers that have plants here and don't need to import with the logistical issues and time that goes with that."

Renault, which owns more than 40% of Nissan, has doubled its sales in Japan over the past four years but it still expects to sell only 3 600 vehicles in 2013. Bourne added: "Between the logistics costs and the exchange rate, foreign brands are about 20% more expensive than Japanese cars in the same range."

Foreign automakers have long complained that Japanese authorities erect huge barriers to entry into the lucrative market, among them requirements for different headlights and extra and costly electronics..

Tomohiko Yoshioka, an executive at Peugeot-Citroen's Japanese unit, explained: "We often have to add equipment to get approval for our models."


That's a key hurdle in trade talks between the European Union and Japan as well as separate negotiations involving Tokyo and Washington, the latter leading the charge for a mooted Trans-Pacific Partnership. The proposed trade pact's dozen members account for about 40% of the world's economy.

General Motors, which in 2012 was overtaken by Toyota as the world's most prolific automaker, has only 34 dealers in Japan for its Cadillac and Chevrolet brands and sold only about 1000 cars there in 2012 - against 4700 dealers for its Japanese rival.

George Hansen, a spokesman for GM's Japan unit, weighed in: "Anything that can help to bridge the gap between Japanese and international regulations would be welcome, including the TPP."

Ford boss Alan Mulally has been more blunt, accusing Tokyo of manipulating the yen's sharp decline over the past year to gain another trade advantage. The US' United Auto Workers' union has called Japan "the most closed automotive market in the world"; the European Automobile Manufacturers' Association said earlier in 2013 that it backed free-trade agreements which were "balanced and provide real opportunities for export".

It added: "We still have some reservations about an FTA with Japan."


German automakers and Sweden's Volvo have done better in Japan, accounting for about 75% of the foreign cars sold in that country. VW, the world's third most-prolific producer whose brands fall squarely in the economy to middle-priced range, expects to sell 60 000 vehicles in Japan through 2013.

The company claimed: "Japanese consumers do not like to take risks. They want to feel confident in the brand they're buying. We're working on our image with well-known Japanese celebrities to improve our connection with consumers."

But Volkswagen's presence in the key market comes at a big cost, according to one competitor. "They sell at a loss."

Satoshi Hoshikawa, a spokesman for BMW, said the firm sold 40 000 cars in Japan in 2012 because "we constantly change our models to meet customers' needs" with a range of models that includes diesel and hybrid offerings - a nod to the country's drivers who tend to expect fuel-efficient wheels.

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