Japanese paying for prestige

Press, 30 June 1983, Page 20

Japanese paying for prestige

NZPA Iwaki, Japan Japan sold the world 5.6 million vehicles last year, but in this northern Japanese city Mitsuo Okada profits from the prestige of foreign cars.

Okada Motor Co., Ltd, a 19-year-old family business with a staff of four, sells only three or four cars a year, mainly Mercedes-Benz from West Germany. The price of each would buy 15 to 20 sub-compact Japanese cars.

“My customers include doctors, nightclub owners and yakuza (gangster) bosses who can readily afford to pay 15 million yen ($NZ97,680) for a four-door Mercedes,” Mr Okada said. “They favour big imported cars for the sake of social status, and a yakuza boss wants to impress his rivals.”

Most of the imported cars sold in Japan’s 175 foreign car showrooms come from West Germany — Volkswagen, Mercedes and B.M.W. in that order.

Imports from the United States slumped by half from 1981 to 1982, making up only 10 per cent of the 35,500 foreign cars shipped to Japan last year.

Mr Okada blamed the sinking popularity of American cars on moves by troubled U.S. automakers to copy Japanese cars. “My customers who don’t care about fuel efficiency are disappointed that American cars are no longer American,” he said.

Mr Okada, who stopped importing American cars three years ago, said his customers used to buy them for their powerful engines. “But you can guess tneir shock when their American cars were easily outpaced on the highway by 2000 cc Japanese models,” he saidi

“They couldn’t tolerate it.” Mr Okada said that Japanese small cars were superior in quality and performance to U.S. models.

But Kenji Kawai, spokesman for Ford Motor Co. (Japan), Ltd, a wholly owned subsidiary in Tokyo of the second largest U.S. car maker, disagreed that quality was the reason for declining’U.S. car sales in Japan. “The main factor is the foreign exchange rate,” Mr Kawai said, referring to the yen’s steep depreciation against the dollar last year, which made American cars more expensive for Japanese buyers. Mr Okada has been highly critical of tight government quality restrictions on both domestic cars and imports. He published a book last July attacking the Transport Ministry’s regulation that domestic-made cars undergo meticulous and costly mechanical inspections every two years. Mr Okada also was the first person to lodge a complaint with the Office of Trade Ombudsman, set up in January last year as part of government measures to give foreign manufacturers wider access to Japanese markets.

Mr Okada complained that when he tried to take delivery on imported cars he had problems getting them cleared by customs officials.

“They work on individual whims rather than from established standards,” he said. He said he protested to the Ombudsman after officials at Tokyo airport refused to release two Mercedes until he had removed fire extinguishers and first-aid kits on the grounds that they, not the cars, did not meet local standards.

To alleviate persistent criticism from the United States and the European Community over Japan’s large trade surpluses with them, the Government announced last month new measures designed to make its safety and operating standards more equitable for imported goods, including cars.

On cars, the Government said legislation would be revised to simplify procedures for certifying that foreign-made cars met Japanese safety and operating standards.

Foreign manufacturers have complained that the current system is time consuming, costly and a major impediment to importing cars into Japan.

The new regulations will ease the present “type designation system” under which inspection of each car of a model is not required if three samples and lengthy documentation have been approved.

Government officials said that under the proposed revisions the costs would be cut by requiring submission of only one sample car and simplified documents. The time taken to qualify for approval would be cut from about seven months to 10 weeks.

The Japan Automobile Importers’ Association has welcomed the move but said it was too early to tell what effect it would have on foreign car sales.

One association official, noting that foreign cars sell in Japan for about twice the price of their Japanese equivalents, said: “If their prices fell to around the levels of Japanese cars of the same type, customers would often choose the importedtcar.”