TOKYO - On the surface, the Japanese seem to love anything foreign: they buy the most Louis Vuitton bags in the world, watch the most Hollywood movies outside America and sprinkle their ads with English slogans.
But cars have always been an anomaly. In a country where 16 out of 17 cars are Japanese, foreign makers are facing an uphill battle to hold onto a miniscule market share that hasn't grown in more than six years.
Even as makers announce new partnerships to increase sales, as BMW did this week with Japan's Yanase & Co., industry executives concede it will be difficult to raise their 6 percent slice of the domestic pie.
"Japan is a unique market," says Tsutomu Umeno, president of Volkswagen Japan.
"Local brands are extremely competitive, especially since Japan has strict fuel-efficiency rules. Besides, there's no autobahn on which to enjoy driving powerful European cars," he said.
The market share held by foreign carmakers has not grown since sales peaked in 1996 -- and that was only after the Japanese government intervened with deregulation and the yen's sharp rise made imports cheaper.
Domestic rivals also enjoy a web of distribution networks and a reputation for building low-priced, top-quality cars, all of which has made life that much more difficult for foreign brands in Japan.
And with the economy falling on hard times, business is getting even tougher.
Although foreign brands command a third of the market for full-sized passenger cars, that segment is shrinking fast as consumers drive off with cheaper and smaller cars.
With the odds stacked against them, foreign makers are now shifting gears to get back in the race.
In the past few months, they have signed deals to open new showrooms, announced plans to diversify their product lines and began offering flexible payment options to entice young buyers.
For BMW, the solution is to improve its sales technique.
This week, the German carmaker said it would put Yanase, Japan's oldest distributor of imported cars, in charge of eight sales outlets in Tokyo, with more to come later.
"We're good at making cars but we're by no means the best at retailing," BMW Japan President Ludwig Willisch said.
That deal comes just two months after a similar pact between Yanase and Audi, a unit of Volkswagen AG.
Audi, which two years ago had only five exclusive showrooms, boosted the number of dealerships to 76 last year through its deal with Yanase, helping sales grow by 44 percent in 2002.
Volkswagen, Japan's top foreign seller with a 23 percent share of the imported car market, also will open several new dealerships this year as it targets a 3 percent rise in sales to 62,000 units.
Jaguar, the luxury arm of Ford Motor Co., will add at least 10 showrooms in 2003 to bring the total to more than 100, while renovating three-quarters of existing dealerships.
Another issue is pricing, which foreign carmakers are reluctant to lower because they sell so few cars.
Jaguar is trying to overcome this hurdle by offering more financing options, such as payments in small installments, to lure younger drivers to its line of cars, including the X-type 2.0V6, the first Jaguar to cost less than four million yen ($33,000).
BUILD AND THEY WILL COME
Just as rapidly, foreign brands are rolling out new cars to fill their showrooms, and many plan to use this fall'sTokyo Motor Show to stir interest in fresh offerings.
In January alone, DaimlerChrysler introduced the CLK55 AMG luxury coupe, an addition to its Mercedes-Benz line, General Motors unveiled its Saab 9-3 sports sedan, and Audi introduced the RS6 sedan and TT Roadster 1.8T.
Audi also is planning at least three more models this year.
Volkswagen's new models come in all sizes. Its pipeline includes the Lupo GTI, Touareg SUV and New Beetle Cabriolet, following last month's launch of the Golf R32.
"Looking at the last few years, it seems that if you introduce new models, customers will come," Jaguar Japan President David Blume said recently.
Jaguar will begin selling its new XJ, the world's first car with an aluminium body, this summer.
Still some say the biggest hurdle for Japanese buyers is psychological. Many Japanese, for instance, associate a big Mercedes sedan with gangsters.
"There's always a debate about striking a subtle balance between presenting the cars as different but not too foreign," says Anthony Millington, head of the European Automobile Manufacturers Association in Tokyo.
He says carmakers even fuss over whether to use foreigners or Japanese as models in catalogues.
"You have to make sure Japanese consumers are not uncomfortable being associated with a foreign car," he says.