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. 

Case Study: Small U.S. Manufacturer doing business in Japan-Part 3

Lessons Learned:

In order to minimize the problems that might arise around communications on these type of cross-cultural projects, it is very important for companies to:

1. Establish a clear communication plan
2. Determine and set expectations on both sides
3. Create a plan that details the roles and responsibilities of each side in achieving goals and meeting expectations

Case Study: Small U.S. Manufacturer doing business in Japan-Part 2

The Challenge:

My client was approached by a Japanese distributor who wanted to sell their products in Japan. My client did not have the resources in house and lacked the Japanese language and cultural background to do this on their own. Through a search on the web, they found my company.

It is no surprise that one of the major challenges that faced the client was in the area of communication. They “found communications to be complicated by cultural and language differences and that Japanese expectations are quite different from American ones.”

Case Study: Small U.S. Manufacturer doing business in Japan-Part 1

In the course of providing services for a U.S. client based in the Mid-West seeking to do business in Japan, I realized that there are many challenges that smaller companies face when trying to do business in a market as far away and as different as Japan such as:

• Lack of know how
• Lack of resources to dedicate to projects and information gathering
• The general “ Not even sure where to begin”
• Communication challenges

Lacking the resources to dedicate to managing and doing the actual day to day work involved in the process of entering the Japanese market, most companies, especially smaller ones, either:

• Give up or think they cannot possibly do it so they don't even try
• Employ incorrect entry strategies
• Spend precious time and money in the wrong areas and often times don’t achieve their goals

This was the case of my client. Check back to see how we were able to help them.