Pioneer grew but failed to change with the times
JAMES B. TREECE

Yanase opened Japan to Western cars

Pioneer grew but failed to change with the times

COMMENTARY
James B. Treece is industry editor of Automotive News.
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For more than half a century, Jiro Yanase personified the import-car market in Japan — for better and worse.

He opened the door to foreign cars at a time when tariffs and, later, nontariff barriers kept the Japanese market closed. But after opening it a crack, he then plastered it in place so it wouldn't open any wider.

Yanase was a man of his times. An era ended March 13 when he died of pneumonia in a Tokyo hospital at age 91.

To a great extent, Yanase created Japan's import-car market. In 2004, he became the first — and so far the only — overseas retailer inducted into the U.S. Automotive Hall of Fame. The citation read in part, "Jiro Yanase has provided American and European manufacturers the initial entrance — and the most successful means of selling cars — to the Japanese market."

As recently as 1996, Yanase & Co. handled one of every four imported cars in Japan, excluding so-called reimports from Japanese plants in the United States.

His father founded the company in 1915. It got its big break importing General Motors trucks to rebuild Tokyo after the Great Kanto Earthquake of 1923. Jiro Yanase joined the company in 1939, right when the military-dominated government was shutting down foreign carmakers in Japan as part of its war mobilization strategy.

After a 1963 chat with Japanís prime minister, Jiro Yanase began a strategy of importing only small numbers of luxury cars, not popularly priced models.

Rebuilding, cutting back


In May 1945, Yanase became the company's president and rebuilt ties to foreign automakers after World War II. Yanase & Co. was an importer, distributor and dealer. At various times it sold Cadillac, Buick, Pontiac, Chevrolet, Oldsmobile, Saturn, Opel, Saab, Vauxhall, Mercedes-Benz, Chrysler, Volkswagen, Audi, Volvo and Fiat cars.

His company's strategy was shaped when Yanase was invited to a Sept. 22, 1963, luncheon with Shigeru Yoshida, then Japan's prime min- ister.

The two men chatted about the rebuilding of their war-ravaged nation and about how far it had come since 1945. In typically oblique Japanese fashion, Yoshida eventually came to his point. A poor island nation such as Japan, which had to conserve scarce foreign currency, couldn't afford to waste money on needless imported cars.

Shortly before, Japan had liberalized its foreign-exchange controls, allowing individuals to import cars free of any overt legal ban for the first time in nearly three decades. Indeed, Yanase had just delivered a brand-new Mercedes sedan filled with roses to Yoshida.

Yanase took the hint. Henceforth, he would import small numbers of luxury cars and sell them at high markups. He had no interest in building volume sales of popularly priced models.

A tiff with VW


As Japan grew to become a wealthy nation, Yanase continued to view his products as luxury goods not suited to the masses. That strategy led to a falling out with Volkswagen AG in 1992.

VW sought to sell more cars in Japan. Toyota Motor Corp. wanted to ease the anti-Japan trade rhetoric in Europe. The two signed an agreement whereby Toyota would buy cars from VW and sell them through a limited number of Toyota dealerships in Japan. It was a first step toward VW setting up its own distribution network.

Outraged, Yanase dumped VW before the German brand could fire him. Then he signed GM's Opel brand to replace VW in his stores and pumped up Opel to spite VW. Opel sales soared briefly. But Yanase's sales staff soon reverted to form, directing shoppers with Opel trade-ins to higher-priced Mercedes models. That, plus GM's inconsistent strategy for Opel in Asia, eventually killed the brand in Japan.

VW's move set the stage for others. Today, most major automakers sell in Japan without middleman Yanase. The company has largely given up the importer and distributor roles. It now amounts to a megadealer, selling several import brands but not controlling their Japan market strategies.

For that matter, few carmakers strive to get into Japan anymore. Brands with established dealer networks there — including VW, Audi, Mercedes, BMW, Peugeot and Volvo — can make good profits. But others look at the cost of setting up a Japan network and turn instead to China, where the potential for profits today and volume tomorrow is greater.

During Japan's rapid economic growth and motorization, Jiro Yanase unlocked the door to an expanding market for U.S. and European carmakers. But he remained stuck in a 1960s mind-set, and that hurt both his automotive partners and his own company.

James B. Treece lived and worked in Japan for 22 of the past 32 years.

You can reach James B. Treece at jtreece@crain.com.

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