TOKYO: Domestic manufacturers account for over 95% of the Japanese car market as overseas carmakers struggle to meet the expectations of local buyers and to overcome various non-tariff barriers.
While US marques have largely avoided Japan altogether – again skipping the bi-annual Tokyo Motor Show currently running – European brands have made some small inroads.
Volkswagen, for example, expects to sell 60,000 vehicles in Japan this year, Japan Today reported. Japanese consumers do not like taking risks and they want to feel confident in the brand they're buying," the company said.
We're working on our image with well-known Japanese celebrities to improve our connection with consumers," it added.
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 just 3,600 vehicles in 2013.
Price was a crucial factor according to Frederic Bourene, head of Japanese marketing for Renault. "Between the logistics costs and the exchange rate, foreign brands are about 20% more expensive than Japanese cars in the same range," he explained.
BMW, another German firm, sold 40,000 cars in Japan last year. Spokesman Satoshi Hoshikawa explained that the firm looked to "constantly change our models to meet customer needs".
That meant offering a range of models including diesel and hybrid variants, as Japanese drivers tend to expect fuel-efficient vehicles.
Overseas carmakers, however, have generally not addressed the popular category of "kei" cars. These vehicles with an engine size of 660cc or less account for about 40% of new car sales and are the main battleground for domestic auto sales, according to The Japan News.
While they are aimed at elderly buyers, observers have noted a growing demand for small vehicles that are fuel efficient and have a tight turning circle. A number of two-seaters were also on display at the show.
Data sourced from Japan Today, The Japan News; additional content by Warc staff