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International Business : Right-Hand Thinking : U.S. Auto Firms Make 1st Serious Push in Japan

October 26, 1995|DAVID HOLLEY | TIMES STAFF WRITER

TOKYO — Thick artificial mist swirled across the stage, then a bright red Jeep Wrangler emerged from the fog to take the center spot in a lineup of five right-hand-drive Chrysler vehicles built with Japan in mind.

The effort Chrysler Corp. put into this bit of press conference showmanship reflects a new level of enthusiasm for the Japanese market by Detroit's Big Three auto makers. Four months after the United States and Japan reached agreement on steps to improve foreign access to the Japanese auto market, Chrysler, General Motors Corp. and Ford Motor Co. are rapidly expanding their presence here.

Hoopla is hitting a fever pitch this week, with top auto executives from the United States and around the world gathered for Wednesday's start of the 31st Tokyo Motor Show, a huge 15-day event held every two years in a suburb of the capital.

Through many acrimonious years of U.S.-Japan disputes over auto trade, the American side charged that Japan's market was closed, and the Japanese side charged that the Americans, by marketing big cars with the steering wheel on the wrong side, weren't really trying.

Now both those claims, though perhaps not quite dead, are at least rapidly fading. The Americans are coming.

The June auto agreement "is another step absolutely in the right direction," Chrysler Corp. Chairman Robert Eaton told reporters Tuesday. "We believe the barriers will progressively come down and this will ultimately be a very open market and a market that foreign companies can be very, very competitive in. Chrysler in particular can be competitive."

Evidence of the new American push can be seen in what Detroit is bringing to the motor show. Like Chrysler, whose new models include a made-for-Japan Neon due to go on sale here early next year, Ford will be introducing right-hand-drive cars made in the United States: a new Taurus sedan and wagon and an Explorer sport-utility vehicle.

GM already sells an extensive lineup here of about 20 right-hand-drive models made by Opel, its European subsidiary. It will have new Opel and Saab models at the show. (GM owns 50% of Swedish auto maker Saab.) More important, Toyota will be showing a right-hand-drive Cavalier made by GM in the United States. In January, 1,100 Toyota outlets will start selling the Cavalier in Japan under the Toyota brand name, while advertising it as an American-made car.

Indeed, U.S. auto executives sounded so happy Tuesday about their prospects in Japan that they seemed to spend more time sniping at their American rivals than at Japanese manufacturers.

"If you look at Chrysler's press conference--with a Jeep rising out of the smoke--smoke is probably a fitting metaphor for their approach to the market," sniffed Ford spokesman Thomas Mattia. "You still need dealerships to sell."

On dealerships, Mattia said, Ford is ahead, with more than 300 sales outlets, including 53 added in the past 18 months.

It is true that Chrysler is playing catch-up to Ford in that area. But that doesn't mean Chrysler is a slouch. It spent $100 million in late June to acquire a network that includes 10 directly owned outlets and an additional 108 contracted showrooms.

Chrysler's expansion plan, Eaton said, is to have about 50 "main" dealers across Japan--one per prefecture--by early 1997, with most of those dealers not only owning multiple showrooms, but also subcontracting Chrysler sales to other dealers in their area. The number of outlets should hit 500 by 2000, he said.

General Motors, meanwhile, hasn't been running its own dealer network at all, instead marketing its vehicles through the Japanese-owned Yanase chain.

GM President Jack Smith, also in Tokyo this week, said his company will continue its strong relationship with Yanase but will also start to directly recruit dealers that until now have been affiliated only with Japanese manufacturers.

Smith also declared that GM is ahead of its Big Three rivals, with sales in Japan of 42,464 vehicles in the first nine months of this year.

"It ranks us second among importers, close behind BMW," he said. "It is significantly more than Ford and Chrysler combined."

Despite some clear differences in manufacturing and marketing strategies, the Big Three actually are in roughly comparable positions in Japan and have similar plans for growth. It isn't easy to say who is ahead, but all three are trying as never before.

Chrysler, which sold about 13,600 cars in Japan last year, expects to sell about 16,000 this year and 24,000 next year, said Thomas C. Gale, vice president for international operations. The company plans to sell 100,000 vehicles annually in Japan by 2000, Eaton said.

Ford sold 14,321 imported cars in Japan last year, plus 31,875 Ford-brand vehicles made in Japan by Mazda, in which Ford holds a 24.5% stake, spokesman Hiroo Tanabe said. It projects total sales this year of 56,000, including 22,000 imports, and 1996 sales of about 70,000, with half of those imports.

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