Why don't foreign car brands sell well in Japan?

Why don't foreign car brands sell well in Japan?
  • Aug, 2 2023

An Overview of Japan's Automobile Market

Sometimes, you just find yourself asking certain questions that baffle and perplex you... Imagine looking at your wall clock, its chaos of gears and springs working together marvellously to tell time, and asking, "Why doesn’t Japan buy foreign cars?" Now I know it sounds comedic, but I swear, this same thought struck me as I was chatting with Jenny, my wife, about our plans to surprise our kids, Travis and Rylee, with a vacation to Tokyo for the upcoming summer.

You see, Jenny and I have always been fascinated by Japanese culture - the rich history, delicious sushi, cherry blossom festivals, and their technological prowess - particularly in the automobile industry. However, while going through travel reviews and tourism websites, I stumbled upon this fact: Japan doesn't really sell a lot of foreign cars. And the question has been bugging me ever since!

The Love for Domestic Cars

It's no secret that Japan loves its home-grown automobile brands. They have an array of spectacular vehicle manufacturers such as Toyota, Nissan, Honda, Mazda, Subaru... my fingers might fall off if I kept listing them all. So, naturally, this extensive local production plays a significant role in Japanese people's preference for domestic vehicles.

Why opt for foreign-made wheels when the finest automobiles are assembled right next door, tailor-made for their specific market preferences? The Japanese automakers not only understand the market but also consumer needs and the domestic driving conditions, creating efficient, high-quality, and affordable cars that suit the local populace.

The High Standards

Now, let’s divert our attention to something that Jenny always laughs about: my obsession with quality standards. Everything in our household must meet the Aiden-approved quality standards! And just like me, the Japanese also have a keen eye for quality. The high benchmarks set by Japanese car manufacturers have made it extremely difficult for foreign brands to compete in this highly meticulous market.

This isn't just about quality of the vehicles, but also encompasses customer service, showroom experiences, and aftermarket services. It's a full-fledged, all-encompassing expectation. Any compromise on these aspects can lead to a decline in market acceptance, making the challenge for foreign brands considerably greater.

The Tough Regulatory Hurdles

The Japanese automotive market can be, ironically enough, considered something of a complex puzzle. Besides quality standards and consumer preferences, stringent regulations and standards add significantly to the woes of foreign car brands. These comprehensive rules and testing procedures ensure safety and eco-friendliness but inadvertently build a long and winding wall that foreign cars find hard to scale. The degree of difficulties compounds when we factor in the costs incurred in complying with these measures, which are often incommensurate with the potential sales volumes.

Overcoming the Language Barrier

On a lighter note, let’s recall the classic comedic episode when I tried learning Japanese for our vacation and hilariously failed. The language barrier was real! And believe it or not, foreign car brands face a similar struggle. Being a homogenous society, a large number of Japanese citizens are not proficient in English and prefer their native language. So, you see, even when it's about cars, language can be a speed bump!

Redesigning for Kei Cars

We all remember how Travis and Rylee giggled endlessly when they first saw a ‘Kei car’ in a Japanese animated movie, right? These small, compact cars are unique in Japan, thanks to the tax reductions, lower insurance, and parking benefits they enjoy due to Japanese government initiatives to reduce carbon emissions and traffic congestion.

The popularity of these Kei cars gives a beneficial edge to Japanese car manufacturers, while it poses a substantial challenge for foreign car makers as they are forced to rethink and redesign their models to fit within these dimensions, causing a strain on their resources and time.

Riding on the Cult of the New

Now, who doesn’t like the smell of a new car? Every once in a while, I see Jenny looking longingly at the shiny new models on the showroom floors. The Japanese love for new things isn’t limited to technology or fashion but extends to cars as well. In fact, some have turned it into a social norm, regularly replacing old cars with new ones, driving the demand for the latest, innovative domestic models and hindering the second-hand foreign car market.

Mobility in the Future

As I wrap up this auto-filled adventure of thoughts, I can’t help but wonder about the future of mobility in Japan. With self-driving cars, electric vehicles, and a whole lot of upcoming technological advancements, will the scenario change for foreign car brands? Well, we’ll just have to 'gear up' for the future and see.