Japan - US Business News

Car Wars: Japan, U.S., Europe and China Rev up - Part 2

Our man in China, Sven Serrano, continues Car Wars.

Volkswagen in the lead...

Volkswagen leads the way, thanks to its early arrival and link up in China with local partner SAIC in 1984.  A naturally upbeat VW CEO Martin Winterkorn promised to introduce at least 4 new or updated car models for the Chinese market each year, with a commitment to reduce fuel consumption and emissions by 20% by 2010. 

For the still growing luxury market, German manufacturers Mercedes Benz and BMW, had the largest exhibits in Shanghai, while U.S. carmakers Ford, GM and yes, even Chrysler shrugged off bailout worries for a few days here in China as they sought to woo buyers. GM China had about 37 vehicles on display with plans to double its annual sales to 2 million units over the next five years.

Running a strong second are the Big Three of Japan; Toyota, Honda and Nissan. While most of these sales are from local joint ventures, a small number of imports, from Japan reach China and are snapped up by discerning buyers, despite the high tariffs China slaps on incoming cars.

As Japanese car makers seek to lure Chinese drivers with their reputation for quality, durability and gas mileage, at least two makers, Honda and Nissan, are considering exporting cars made in China by their production units to other parts of the globe and possibly to Japan itself in an effort to cut manufacturing costs.

Car Wars: Japan, U.S., Europe and China Rev up - Part 1

The following is written by Guest Contributor, Sven Serrano, our man in China. Sven lived in Japan for years and now lives in China. He visited the Shanghai International Automobile show this past weekend and writes of cars and countries. _______________________________________________________________________________________

This week in Shanghai, the shout of “Gentlemen, start your engines!” was heard twice; first at the Shanghai Grand Prix, where F-1 fans thrilled to a magnificent race won in the driving rain by Sebastian Vettel of the Red Bull team, and then at the Shanghai International Automobile Show, an event now in the world’s spotlight as economic data from the last three months confirms that China’s growing market for new cars has overtaken that of the United States. 

Japanese and American auto manufacturers were out in full force at the show in hopes that Chinese sales can revive their fortunes and soon. Running the pit stop for this historic lap are the technocrats in Beijing. The Chinese government enacted a fiscal stimulus package that has, at least in this sector of the domestic market, unlocked the cash box of middle and upper class consumers eager to buy their first car. Retail taxes on small cars were halved this year and 5 billion RMB have been pledged to spur sales of cars in the hinterland. 

Opportunities in Japan are During Times of Economic Upheaval

The following is by Guest Contributor, Robert Imrie, who thinks the way I think. When everyone else is yelling 'the sky is falling' about the economy, he knows that its time to really get down to business.

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Read international headlines and you might be forgiven for thinking that now is not the time to venture into Japan. Japan’s GDP plummeted 12.7% in the final quarter of 2008; double the rate of the U.S. (-6,3%).  Japanese economic growth for all of 2009 is expected to be –6%.  Japanese companies don’t want to talk business––they’re broke!

Economic downturns can be the perfect time to consider exporting to Japan and to seek Japanese business partners: when times are good, Japanese are the most change-averse country among the world’s economic powers.  Change is expensive.  Change is unknown.  Change is scary. If it ain’t broke, don’t fix it.

The last time the Japanese economy was in such hardship proved to one of the best opportunities for foreign companies in years.

Case in Point:
The Japanese Yen increased almost 30% against the US dollar between1994 and1995, and briefly touched ¥80/US.  Japan’s real estate bubble of the 1980s had burst, saddling its banks with billions of Yen in bad loans that they were unwilling or unable to shed. Japanese stock brokerages like Yamaichi Shoken were going bankrupt as consumers lost trust in the stock market and stopped trading.

Japanese small businesses ask...Where is our stimulus package?

Japanese small exporters and other small companies in Japan are in for a rough time indeed. This is not a new situation. Smaller companies in Japan have been suffering for a long time because the focus has mostly been on larger companies and the banking industry. It is often said and it is true that small businesses are the backbone of a nation; it is true for the United States, for Japan and all nations.

I would like to know what is being done to assist smaller businesses in Japan that is on the scale of what is being done to save the larger companies and banks? 

The news is now focusing more and more on the plight of the small business. I read in the New York Times of a hard hit Japanese exporter of electronic parts. It tells of these small unknown, but vitally important companies that make and supply the components that go into the famous SONY or Toyota products that are sold worldwide. This is a good start to shining a light on the issue but these companies need more than light.

These smaller companies need stimulus packages geared towards them, educational programs that will help them utilize technology to make them more efficient and competitive and a host of other things. I hope the Japanese government starts with monetary help that is so needed AND follows up programs that will help these smaller companies develop and grow.

My company is in the midst of developing a new venture that will assist smaller Japanese and U.S businesses so stay tuned. I will be writing about it soon.