Detroit execs see no breakthrough in Japan

SHANGHAI -- Despite President Donald Trump's tough talk on trade with Japan, Detroit automakers see no path to higher sales there, even with a negotiated breakthrough.

Ford Motor Co., which abandoned the Japanese auto market last year, says it won't return to Japan, no matter what kind of trade deal Trump inks with Tokyo.

And General Motors says it's fine with its current niche toehold, selling a little more than 100 vehicles a month.

Executives from both automakers said political pressure on Japan is unlikely to change market dynamics enough to significantly move the needle in sales. And the resources the companies would need to invest to boost sales in Japan are better spent elsewhere, they say.

The remarks from the sidelines of the Shanghai auto show highlight Detroit's waning concern with winning access to Japan and its shifting focus to new markets -- especially China.

"We'd been in Japan for well over 40 years, and we had been losing money," said David Schoch, president of Ford's Asia Pacific operations. "We continue to find it difficult to win that market. 

"We concluded that our resources are better spent elsewhere." 

In 2015, Ford's last full year in Japan, it sold 4,968 vehicles in the country. That amounted to less than one-10th of a percent of Japan's 5 million-vehicle domestic market. 

Trump has targeted Tokyo for tough new trade negotiations, complaining it is "impossible to sell cars in Japan." Japan's critics argue that nontariff barriers and alleged foreign exchange rate manipulation tip the scales against import brands. 

But there is nothing Trump or Japan can do to make the market worth revisiting, Schoch said. "We would not go back," he said. "We have too many other priorities." 

GM, which sold 1,228 Chevrolet and Cadillac vehicles last year in Japan, still hangs in the market. But executives harbor no illusions about wildly stoking sales there. 

"For us right now, we have a very stable presence," said Alan Batey, Chevrolet's global brand president. "It's not one with aspirations so big that it's burning through a lot of cash." 

After years of trying to grow into a volume player in Japan, partly by leveraging its Opel brand, GM scaled back over the last decade to deal mostly in luxury Cadillac offerings and upscale Chevrolet performance cars, such as the Corvette and Camaro. 

"I wouldn't want to speculate about what it might look like in the future," Batey said, "but clearly for us, it's a market that we'd just like to keep a presence in and see where it develops." 

For Ford, ambivalence about Japan contrasts with its prescription for talks with China. Schoch said he would like the U.S. to tackle several issues with Beijing. Washington should press China to lower its 25 percent tariff on imported vehicles, he said. That rate contrasts with a 2.5 percent vehicle tariff in the U.S., and zero tariffs in Japan. 

Schoch also suggested China should loosen restrictions on foreign car manufacturing here.