Interesting article --

sooooooo........their market is stagnant - dropping actually - and it's 'protected' -- so where do you suppose they'll battle in order to make money?


From the Detroit News:

Asian brands struggling in Japan market
Car, truck sales fell in April for 22nd straight month as population ages, culture changes.


Just about everyone struggled last month in the U.S. auto market. Detroit's automakers lost another sliver of market share. Unusually, so did the hard-charging Asian car brands, as high fuel prices and worries about the economy sapped consumer demand.
But the weakness in the U.S. market is nothing compared with the difficulties automakers face in Japan, where new car and truck sales fell in April for the 22nd month in a row.
In the Japanese fiscal year ended on March 31, sales of cars and trucks -- excluding minivehicles -- sank to 3.59 million units, the lowest annual total in 29 years.
The main reasons for the market's collapse are demographic: Japan's population is grayer than most, and it has started to shrink. "We're pessimistic about the market," said Nissan Motor Co. spokesman Simon Sproule. "People just aren't buying cars."
Changes in the culture have also lowered demand. Japanese now keep their cars longer, and young Japanese are less inclined than their parents were to buy an expensive car to demonstrate that they've "made it," said David Iida, a spokesman for Honda Motor Co. "There's been a change in the mentality."
Detroit's automakers barely compete in Japan -- General Motors Corp. recently sold its stakes in Japanese automakers -- but the situation affects them directly. If the Japanese had better growth prospects at home, they might not be pursuing American customers as doggedly as they are.
Toyota Motor Corp. has probably invested more in the new Tundra pickup than in any other single vehicle, although it will sell the truck only in North America.
Leading Japanese carmakers are also expanding in Latin America and southeast Asia, but they will continue to rely on the U.S. market for the bulk of their profits, analysts say. In recent years, earnings in North America have accounted for 50 to 60 percent of their total profits.
Japan's automakers are also competing more aggressively in Europe -- a trend likely to pile more pressure on GM's and Ford Motor Co.'s European operations.
There's little in the sales figures to suggest any improvement in the near future in Japan. Car and truck sales fell 10.2 percent in April to 217,911 units, the second consecutive double-digit monthly decline. Even sales of minivehicles, one of the few robust segments in the market, dropped last month for the first time in more than a year. Sales of minis -- vehicles with engines no larger than 660 cc -- were down 6.4 percent at 139,779 units.
As the Japanese look to make up sales abroad, the yen's weakness against the dollar and the euro are helping them temporarily. Deutsche Bank analyst Gaetan Toulemonde estimates that of Japan's 4 million vehicle exports, 1.7 million are headed to North America and 1 million to Europe.

 

Since when are signature pics allowed?

The US is pretty maxed out, too - I think the new battle is in China and other countries around the world as they become industrialized.

We might have a special advantage in China since we already have a strong foothold there, plus the Chinese are often not the biggest fan of the Japanese due to past relations - though I've heard that attitude is kind of going away with the younger generation.

 

He's special and you're not.

 

The Japanese market, from what I understand of it is very odd, in how cars are taxed and classified. I read somewhere that it costs more to have a car over x number of years in taxes than it costs to buy a new one. Hence their market keeps getting driven forward. If anyone has a more info on this please post.

 

I hate sig pics - I was about to try to find out where I could turn it off in UserCP if everybody had them enabled.

BTW - I agree, fbodfather is "special". But I probably mean that in a more politically correct sense than you do.

 

Agreed. However the demand in third world countries is going to be for cheap transportation. I doubt US automakers can compete with the locals in that sense.

 

No secret about the Japanese car market. It's been imploding (NOT just stagnant) for at least the past few years.

Businesses instinct is to do whatever it can to survive (though I sometimes wonder if that applies to the Ford Motor Company) and whereever there's a vacuum, it tends to be filled whith whatever is on hand.

All Asian brands are basically setting up shop in North America because it's a very large market with low restrictions on importing (and even lower government standards than Japan has), as well as a market eager and conditioned for Asian brands.

Bad thing is the North American car market IS relatively stagnant.

US automakers.... basically meaning General Motors.... is, in turn, focusing increasingly on China to make up the difference in profit.

China has at least 4 times the population of the US, and is aggressively pursuing modernization. With modernization comes not just wealth, but an expanding middle class. Combine the fact that US makers (like the Japanese brands of the 70s and 80s) makes far superior vehicles than the locals do at a low price, and the fact that the Chinese automotive market WILL eventially become the largest on the planet.... by far... US makers (again, basically meaning GM) has the potential to all but own or at least impressively dominate the Chinese automotive market.

 

I think they can if they build, design, and market their economical vehicles primarily in China. Granted that's not sending a whole lot of dollars back to the US, but it's better than the alternative which is nothing at all. It's really kinda like Toyota, Nissan, and Honda are already doing with a lot of their vehicles in the US. It's cheaper for them to make them here, so they'd rather do that than do nothing at all. They still tend to build their higher end vehicles outside of the country, but even that seems to be slowly changing.

 

From what I got while I was in Okinawa they seem to make it nearly imposable to own an older car. The way the vehicle registration and inspection program works, you almost have to buy a new car every 5 years or take immaculate care of yours from new. Any leak, to include moisture around a seal, has to be repaired to pass inspection. Tire wear cant even be close to a wear bar anywhere. Bushings have to look fresh and be greased. Its way beyond anything Id ever want to put up with. It was ridiculous amounts of money for parts over there too. I replaced a fuel filter on a nissan bluebird for $120. Brake pads were $90. A motor mount was $160. Thats just for parts. We did all the labor ourselves. You start having problems or cant pass inspection, you just go get a new car. You wouldnt believe how many Marines just dump cars in a field that are still in decent running condition. Just so they dont have to deal with it before they leave the island.

 

I don't necessarily agree with that. Yes, they have 4x our population, but the "moderized" area of China consists primarily of only the coastline, and represents maybe 15% of their population. The vast majority of the interior and inhabitants live in 3rd world conditions, and due to a massive shortage of 1) electricity 2) education, and 3) jobs in the interior areas, I personally don't think they are ever going to reach the same economic distribution as we have here.

I'm assuming your "by far" comment means if they reach the same low/mid/upper income distribution as we do, they'd be 4x the car market. I'm saying there's no way a good 2/3rds of their population ever gets clost to that.

I think they can become the 2nd largest car market within the next 10 years...and they may pass us, but they are never going to be #1 "by far". Their one-child policy and overall population decline will start hitting them pretty hard in the next 20-50 years anyway.

They did just happen to pass us recently as the #1 C02 emitter in the world..despite only being about 1/3rd as industrialized. They are inefficient users of energy there, which likewise hurts them much more than us when oil/gas prices spike. I'd say there's an equal chance of their economy tanking as there is them overtaking us as the #1 car market.

 

I don't believe they have passed us YET in CO2 emissions, though they are predicted to do so this year or next. And I believe they rely on a lot of oil/gas but a whole heck of a lot of their energy comes from coal. That's one of the reasons they are one of the bigger polluters.

It'll be interesting to see how they play out in the car market. I think they will eventually overtake us, but a whole lot depends on income distribution, growth over the next decade, etc.

 

I was in japan a few weeks ago...

I saw a late 80's buick (celebrity clone) with fake wood siding and all. I was like

I did see a several other US cars.. Ford Explorer, Jeep Cherokees, Camaros, Astro vans, Suburban and a couple of hummers to name a few. But I saw a lot more European cars (BMW, Mercedes, Mini) than US cars.

 

Good points all.

But consider that if only 25% of China ever is modernized, it will match the population of the US. Also, the combination of the one child policy, every manufacturing company giving eye teeth to open up shop there, and China's government all but forcing an industrial revolution on it's population has every chance to create wealth distribution much like we have here where 10% of the population own 78% of the wealth with our middle class actually being more like top earners of the lower class than actually "middle" wage earners (median wage here in the US at last count was over $144,000... don't know too many "middle class" folks that earn that much )

There's always a curve ball that can throw things off. History is full of 'em. But on the course they're on now, unless something unexpected happens to change that course, I'd say China is something to be alot more than just a little concerned about. I wouldn't for a moment doubt what's easily capable of happening within our lifetimes..... and maybe even much sooner.