TOKYO - Ford Motor Co. (Japan) Ltd. President Eiji Iwakuni is trying to pull his company out of its tailspin by getting Japanese shoppers to 'Imagine Freely.'
That is the tag line for a new corporate ad campaign for Ford Japan, meant to sell an 'American image' of freedom and limitless possibilities, said Ford Japan spokesman Hiroo Tanabe.
But it takes some imagination to see limitless possibilities for Ford Japan right now. The company is in deep trouble.
Through September, Ford Japan's import sales were down 49 percent to 5,785, much worse than the overall import market's 26 percent slide. That is on top of a decline from 21,011 in 1996 to 13,983 in 1997.
Ford Japan long ago shelved its onetime goal for 2000 of selling 200,000 vehicles, half of which were to be imports and half rebadged made-in-Japan Mazdas.
Even worse, in a market where it is tough enough to persuade shoppers even to consider an American car, Ford Japan cannot keep the few customers it has. Ford Japan's retention rate for its previous owners hovers under a dismal 20 percent, the company concedes.
Ford Japan must do better, Iwa-kuni told his dealers at a conference in early October.
'This is like salmon hunting,' he told the dealers. 'Salmon usually return, unless they have a very bitter experience.'
Iwakuni has a three-pronged plan for reviving Ford Japan. It includes a new-product blitz, a complete rethinking of Ford Japan's dealer network and a spate of marketing support for the dealers who survive.
His plan is yet another way Ford Japan is rethinking its sales networks around the globe, much as Ford is trying to do in the United States with the company-owned Ford Retail Network.
Despite the fact that he does not speak English, Iwakuni was hired in April because of his success in remaking Honda Motor Co.'s dealer network in Japan. There, he closed unprofitable stores even as Honda's home-market sales surged from 617,199 in 1995 to 801,576 in 1997.
His goal for Ford Japan: Push sales to 60,000 by 2000 and 100,000 by 2003, including rebadged cars from affiliate Mazda. Indeed, in tallying those sales, 'By the end of 2003, the definition of Ford and Mazda vehicles may be changed,' Tanabe said.
Much of Ford Japan's current problems lie with its product lineup.
In the peak import year of 1996, Ford Japan's sales were built on three key models: the Taurus, the Explorer and the Europe-built Mondeo. Then Japanese consumers were put off by the new Taurus' styling and its lengthened body, which does not fit in Japan's mechanized vertical parking lots.
Taurus sales plunged 64 percent from 6,791 in 1996 to 2,471 in 1997.
The rest of the lineup has struggled, too. Sales of the Mondeo, Mustang and Explorer are all down from 1995 levels.
Ka needs an automatic
Ford's Ka is the right size for the Japanese market and might have curbed the slide, but it initially was engineered only for a manual transmission, and Japanese buyers demand automatics. So the Ka will not go on sale in Japan until next spring.
The Ka's arrival, though, will herald the start of Ford Japan's marketing comeback. It will be the first of 15 new products due over the next six years.
Ford Japan will support its dealers' marketing efforts for the new models with a roadside-assistance program, a magazine for Ford's owner body, expanded training for dealer staff and possibly a certified used-car program.
Iwakuni wants to have his dealers ready for the new models, so he is shaking up his dealer network with plans to shrink and then rebuild it.
His strategy marks
a radical break with Ford Japan's past. Under former President Konen Suzuki, Ford Japan led the Big 3 in pressing for more dealers in Japan, often using the American Automobile Manufac-turers Association to lobby at the government level. Increasing outlets for U.S. car companies in Japan was a key part of the 1995 U.S.-Japan auto accord. But that is all history.
'I haven't heard anyone talk about those numbers in a long time,' said Saturn President Don Hudler during a recent visit to Tokyo.
Fords are sold at 275 outlets in Japan, none of which sells more than 500 a year.
310 outlets by 2003
By 2003, Iwakuni wants to have 310 outlets. But before then, the total probably will drop, as some dealers decide not to invest to meet his minimum standards for signs and other facilities, based on three categories of dealers.
These will include 30 to 40 large-scale stores selling more than 500 vehicles a year, and 200 medium-scale outlets selling between 240 and 500 vehicles a year. Both will sell the entire Ford Japan lineup.
The third category will be specialty shops. Iwakuni calls them 'pro shops,' boutique-like stores that would sell only part of Ford Japan's lineup. For example, one dealer might sell only Mustangs, while another carries only the Explorer and a smaller sport-utility being developed jointly by Ford and Mazda.
Some dealers will be able to retrofit their current stores to meet the new design and sign criteria. To build one of the new large-scale outlets from the ground up, however, probably would cost between ¥300 million and ¥500 million, or about $2.6 million to $4.3 million, Tanabe estimated.
A specialty store might be built for as little as $350,000.
The smaller option may help Ford to hold onto dealers who do not want to pay the larger amounts for a bigger store. Still, even the lesser investment in a franchise that appears to be in free fall will require a Japanese dealer to 'Imagine Freely.'