Overview
The lecture examines the dominance of Japanese cars in the U.S. market versus the limited presence of American cars in Japan, exploring reasons for this imbalance and its implications.
Japanese Cars in the U.S. Market
- Japanese brands are among the best-selling automakers in the U.S. and dominate several market segments.
- Japanese automakers employ many American workers and build a third of all vehicles manufactured in the U.S.
- Japanese models, including sedans and pickups, are widely popular in America.
American Cars in Japan
- American automakers have a negligible market share in Japan; Ford left the market in 2017, and GM sold only 700 cars in 2018.
- Over 95% of cars sold in Japan are Japanese; most imports are luxury European cars.
- American brands like Jeep sell only about 10,000 vehicles in Japan annually.
Barriers to Entry
- There are no tariffs on U.S. imports in Japan, but critics cite technical and regulatory barriers.
- Japanese regulatory processes are closed, limiting external input from foreign automakers.
- U.S. trade associations and government officials criticize the perceived protectionism.
Consumer Preferences & Market Differences
- Japanese consumers prefer small, efficient cars suited for narrow streets; "Kei cars" make up 40% of the market, which U.S. automakers do not produce.
- American manufacturers focus on large vehicles like SUVs and pickups, which are not in demand in Japan.
- Car buying in Japan includes high levels of service, custom ordering, and strong post-sale customer care.
Perceptions & Historical Factors
- Japanese consumers view American cars as inefficient and unreliable based on past decades, despite recent improvements in U.S. auto quality.
- Japanese automakers’ reputation for reliability and efficiency remains strong.
- The negative image of American cars lingers from scandals and poor models in the 1960s–1980s.
Global Challenges for U.S. Automakers
- U.S. automakers also struggle in other international markets, including South America, Europe, and potentially China.
- Without changes, U.S. automakers risk becoming solely domestic truck and SUV sellers.
Key Terms & Definitions
- Kei Cars — Small Japanese vehicles designed for efficiency and maneuverability in tight urban environments.
- Market Share — The proportion of total sales within a market held by a specific company or brand.
- Technical Barriers — Regulatory or procedural rules that make it difficult for foreign companies to sell products in a market.
Action Items / Next Steps
- Review Japanese consumer preferences and their impact on auto imports.
- Explore recent changes in the U.S. automotive industry’s approach to fuel efficiency and reliability.