TOKYO -- If you think its tough selling the Detroit 3 lineup in the United States, try hawking a Cadillac or Jeep in Japan. Especially these days.
The Japanese market, never friendly to American cars in the best of times, is getting even worse, particularly amid swirling speculation of Detroit 3 bankruptcies.
And no one here knows the travails of moving Detroit metal more than Akio Wada, president of Yanase Global Motors & Co., a dealership group synonymous with imported cars in Japan.
Yanase handles nearly 15 percent of all foreign cars in Japan. The dealer group started importing Buicks and Cadillacs in 1915 and today accounts for one in four Chevrolets sold here.
Despite its storied history, Yanase is being forced to close stores in an increasingly hostile environment.
Weve been booking losses for as long as I can remember, Wada said in an interview in December at Yanases sprawling motor mall in central Tokyo. But now with the economy the way it is and the status of the Big 3 in limbo, its a double punch.
Overall domestic sales in Japan were down 2.1 percent through September. But imports slumped 12.7 percent, with Ford falling 22.8 percent and Chrysler tumbling 37.6 percent.
Yanases business in Ford, General Motors and Chrysler products chalked up an $11.4 million pretax loss in the fiscal year that ended Sept. 30, 2008. As a result, the company put the three brands under one subsidiary and closed four of its 36 dealerships handling the cars.
The move aims to trim the loss to $3.4 million this year. But Wada calls that difficult.
Yanase is hardly alone in feeling the pain. Across Japan, Detroit 3 dealers are in retreat. Since 2005, the number of GM outlets nationwide has fallen to 47 from 73. Chrysler LLC shuttered 13 to give it 63 sales points, and Ford Motor Co. reduced its showrooms to 55 from 84.
The cuts are a far cry from the optimistic volume game that GM hopelessly pursued here in the 1990s. The automaker abandoned that in the early 2000s and switched to a niche strategy, focusing on Cadillacs, SUVs and Korean- and Japanese-built vehicles. But that approach is becoming a little too niche.
Including Saab, GM sold only 9,514 vehicles in Japan through September. And North American-built models totaled a mere 2,220 units, down 1.3 percent from 2007.
Hedging with the Germans
As recently as 1980, GM was the No. 2 automaker at Yanase. But now it doesnt even make the top 10. The dealership has bulked up on German makers to hedge against slumping demand for American offerings. Today, Volkswagen, Mercedes-Benz and BMW are Yanases mainstays.
Cadillac sales at Yanase actually have climbed 40.8 percent to 352 units this year, while Hummer has doubled its business to 158 vehicles.
But both increases resulted from the introduction of new right-hand-drive models. No new models are expected in the coming year, and the same goes for sales increases.
If one of the Big 3 goes into Chapter 11 bankruptcy, the Japanese media will latch on and that will be the end of it, Wada said. My sales would fall by half.
The litany of grievances against American cars or Ame-sha, as they are derogatorily called in Japanese is much the same as ever. To finicky Japanese drivers, they are simply too big for the countrys narrow streets, too greedy for gasoline and too likely to break down.
Then there is pricing. Yanases Cadillac CTS starts at ¥5.0 million ($56,700), more than $10,000 higher than in America. You can thank shipping and low volume for the difference.
Selling Detroit here takes a special knack, says Wada, who has been doing it for four decades.
Key points include:
Highlighting the individuality of American brands.
Loading cars with top-shelf options and amenities.
Stocking right-hand steering for the Japanese market.
A stroll through Yanases Chrysler showroom underscores how Detroit nameplates try to use the American image to their advantage. The space is adorned with icons of Americana, such as neon Route 66 signs. And the brand cultivates a nonconformist identity with a campaign logo depicting the Japanese characters for ordinary crossed out with a big red X.
Yanase sells about 11 percent of all Chrysler-Jeep-Dodge vehicles in Japan, yet the brands dont even get their own showroom. They share the floor with Mercedes used cars.
Competing against the Germans is a top challenge for Cadillac. Japanese dealers tend to sell Cadillacs fully loaded with options that tech-savvy Japanese drivers crave, such as air-conditioned seats, iPod connections, keyless entry, navigation systems and Bose audio.