HANS GREIMEL

Japan a closed market? Don’t tell VW

Automotive News | September 20, 2012 - 2:29 pm EST

TOKYO -- For all the complaints about Japan’s market being closed to imports, it doesn’t seem to bother Volkswagen.

The German juggernaut, aiming to be the world’s biggest carmaker by 2018, wants to double its Japan sales by then.

The goal to boost sales to 110,000 units in Japan was floated this week as VW debuted its Up small car here.

The company sold 50,635 vehicles last year, making it Japan’s top foreign brand. And the short-term sales goal would blow away VW’s all-time sales record of 61,213 cars in 2001.

It would also make VW the first import brand to crack the 100,000-unit mark in Japan -- at least since 1966, when the Japan Automobile Importers Association began keeping data.

VW is bullish on Japan, despite hurdles to imports and despite the moribund domestic market’s perpetual state of decline.

So what gives?

VW is taking a multipronged attack to Japan. It will offer new products, such as the Up and CC sedan. It will enter new segments, by bringing diesel offerings back to Japan. Perhaps most important, it plans to expand its dealer network. The number of outlets should rise to 337 by 2018, from 246 now.

Will VW succeed in Japan’s notoriously insular market?

Other foreign hopefuls, including Ford and General Motors, have made valiant attempts to go mass in Japan before, to no effect. Today, the Detroit 3 have all but given up on the country. Ford sold 3,469 units here last year; Dodge-Chrysler, just 1,717. Chevrolet and Cadillac combined for only 2,660.

Yet, VW has some reason to be optimistic. As a German brand, it enjoys extra cachet in Japan that the Americans can’t seem to muster. It can trade on its image and price at a premium.

And at least some hurdles are falling. After a spat with importers about which brands qualify for Japan’s eco-incentives, the government opened the latest round of subsidies to foreigners. Several European brands, including VW, qualified, but no U.S. brands did.

That helped lift sales of foreign-brand passenger vehicles 22 percent to 150,711 units through August. So the tide is rising.

Hans Greimel is Asia editor for Automotive News.Hans Greimel is Asia editor for Automotive News.

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