Boosting U.S. Car Sales in Japan Is His Mission : Autos: Japanese government’s man in Detroit is helped by relaxed regulations in his homeland and dollar’s slippage against the yen.
His job is to help sell American cars in Japan. His unlikely boss: the Japanese government.
Masayuki Shima’s goal is to boost the U.S. Big Three’s market share in Japan tenfold. “Then I’ve accomplished my mission,” he said.
Shima works with General Motors, Ford and Chrysler to help their cars pass the myriad Japanese government regulations required for imports, rules that have long baffled and frustrated Americans.
His position grew out of then-President George Bush’s visit to Japan in 1992. Bush brought along an entourage of American businessman, including auto executives, pushing the bilateral trade dispute to the forefront of the trip.
U.S. and Japanese negotiators met in London last month to try to restart talks about auto trade that have stalled since October. The auto sector, which makes up more than half of the $60-billion U.S. trade deficit with Japan, was also the top item when President Clinton met Japanese Prime Minister Tomiichi Murayama in Washington last week.
Carrying out Shima’s mission of a tenfold increase in the Big Three’s Japanese market share isn’t as dramatic as it sounds. Even after a doubling in sales in 1994, cars made by GM, Ford and Chrysler make up less than 1% of the Japanese 6.5 million-unit auto market.
By contrast, the Japanese account for about a quarter of the U.S. market, including cars produced at “transplants,” the factories Japanese car makers set up in the United States.
Shima, a wispy, quiet-mannered man, regrets that Tokyo didn’t act sooner. It was only eight months ago that the Japanese Transportation Ministry created his position in Detroit.
“That’s why we’re here now to show things don’t have to be that complicated or hard,” he said in a recent interview. “The ultimate goal, I believe, is correcting the trade imbalance.”
For years, Tokyo has promised to relax the government regulations that many attack as a major trade barrier. But the rules remain, including emission tests that Tokyo says are geared to Japan’s more crowded roads, and a requirement that turn-signal lights be orange, not red.
Until recently, a dealer in Japan had to take every American car sold to a special inspection office for detailed and unwieldy tests before the customer could take it home.
That process, including filing a 20-page document, took about half a day. Going for quick sales, smart salesmen geared their clients away from imports, U.S. auto officials say.
Then last spring, Tokyo gave the go-ahead on a simpler way of obtaining government approval.
Under the new Type Designation Approval System, Shima and other Japanese officials carry out the tests in the United States--once and for all for each model, instead of individually for each vehicle.
At least 2,000 units must be exported for a model to qualify for Type Designation.
Several Ford models, seven GM models and Chrysler’s Jeep Cherokee have been approved under the new method. The Chevrolet Cavalier, which GM plans to sell under the Toyota label, is also expected to use the new method.
“It was a step in the right direction, a positive step, not a giant step, but not a trivial step either,” said Peter Badore, general manager of Asia-Pacific operations at Chrysler.
Some Americans, unfamiliar with the workings of a massive and rigid Japanese government bureaucracy, are dubious about what Shima can accomplish.
Chrysler spokesman Tony Cervone said he sees Shima primarily as a mediator, not entrusted with major decision-making powers. Cervone’s impression was that Shima’s main job was to bring questions to higher-ups who still call the shots.
“Americans think their own country’s way of doing things should be followed by the rest of the world,” Shima said in response to such skepticism.
Although even many Japanese have blamed a bloated bureaucracy for locking outsiders and newcomers out of the market, Shima said the targeting of bureaucrats was a political ploy.
Furman-Selz analyst Maryann Keller saw other hefty obstacles for U.S. car makers. U.S. auto makers still need to offer more right-hand drive models and expand distribution outlets, she said.
Opening new dealerships in Japan is not easy--the tightly networking dealerships are largely run by the powerful Japanese car makers.
But Shima is optimistic, believing U.S. auto makers have debunked the old stereotype of American cars as chintzy gas-guzzlers and come up with stylish attractive products. The problem is many Japanese still don’t know much about Americans cars.
“Now, when they think about buying a car, they’re going to include American cars on their list,” Shima said. “Up to now, there was no room for choice.”
For one, Shima’s sure the Japanese will go for the Pontiac Grand Am he drives here and loves.
Even before Shima got started on his new job last April, U.S. auto sales had been climbing steadily in Japan.
The Big Three combined exported 14,500 cars during the first 10 months of 1994, more than double the total for the same period in 1993 at 5,600 cars, according to the American Automobile Manufacturers Assn.
Market share in Japan, as measured by new registered cars, went up from 0.4% to 0.8%.
Chrysler introduced a right-hand drive Jeep Cherokee sport-utility vehicle, a hot-seller in Japan and the first U.S.-made vehicle to be approved under the new Type Designation method.
About 4,000 Cherokees were sold in Japan in 1993, making up 70% of Chrysler sales in Japan. Chrysler sold more than 10,000 Cherokees by the end of November, 1994.
The rising yen has helped push the prices of American cars down, making them attractive buys.