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Foreign Car Sales Regaining Luster in Japan's Recovering Auto Market

25 September 2000

Foreign Car Sales Regaining Luster in Japan's Recovering Auto Market; Imports Maintain 30 Percent Share of Large Car Sales

    WASHINGTON, Sept. 25 The outlook for foreign brand car
sales in Japan is brightening despite the current slow growth auto market.
This is due both to the recovery of Japan's large car market and investment by
foreign companies in the Japanese vehicle industry, according to Japan Auto
Trends, the newsletter of the Japan Automobile Manufacturers Association
(JAMA).
    For example, imports hold about 30 percent of Japan's large car market. In
the first half of this year the large car market grew at 15 percent. Large car
imports reported modest growth so far this year, but they bounced back last
year at a sharp 19 percent in a declining market.
    "Although overall imports are down 2.8 percent in the first half of 2000,
it was not caused by large car performance, but poor sales performance in the
small car market.  Growth opportunities are expanding because of auto
manufacturers' new global alliances. Foreign auto companies are developing new
sales networks through their investments in Japanese manufacturers," said
William C. Duncan, JAMA General Director USA.
    Renault's alliance with Nissan, DaimlerChrysler's alliance with Mitsubishi
and GM's alliance with Fuji are resulting in revamped marketing strategies. In
addition, Ford, who is allied with Mazda, foresees Japan as a base for
developing business throughout Asia.
    "Conversely, these alliances are resulting in joint projects outside of
Japan designed to reduce costs through economies of scale. These ventures will
facilitate reverse imports in specialty markets. All of these actions will
also improve positioning in Japan's small car market," Duncan added.
    In addition, the newsletter reviews the slow recovery of Japan's overall
vehicle market. Earlier this year, former JAMA Chairman Yoshifumi Tsuji
forecast that vehicle sales in Japan would grow a modest two- percent for the
year. For the first half of 2000, sales rose at 2.3 percent basically in line
with this forecast.
    Japan Auto Trends latest "Executive Highlights" features 39-year-old Mazda
Motor Co. President and CEO Mark Fields who is the youngest man to head a
major Japanese corporation.
    The newsletter also focuses on Japan's new mega malls. This fall, the
Toyota mega mall Colorful Town Gifu opens, housing not only new and used cars,
but movie theatres, restaurants and even a major Japanese department store.
Last year Nissan Motor Co. opened Carest Zama, a shopping mall built on the
site of a former Nissan assembly plant.
    The newsletter also highlights the $31.9 billion in purchases of U.S.-made
auto parts by Japanese manufacturers, a new high. This figure represents a
12.7 percent jump over the $28.31 billion purchased last fiscal year. JAMA
bases its numbers on actual invoices accrued over the Japanese fiscal year,
April 1 through March 31, including all purchases by JAMA members of parts,
materials and accessories.