Why Ford and Other American Cars Don’t Sell in Japan [video] | Hacker News Reader

Why Ford and Other American Cars Don’t Sell in Japan [video]

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28 pointspseudolus53 comments

American cars don't sell well on any market outside the US domestic one. If you need a tough vehicle for the desert, you buy a Toyota Land Cruiser, not a Chevy pickup truck. If you need a well-built, well-handling sports car you buy a Porsche Cayman and not a Ford Mustang. Comfy long-distance cruiser - a Mercedes E-class over a Cadillac CTS by a huge margin.

The decision to buy an American car outside the US is completely irrational and emotional. In Europe it's mostly the posers who want to look rich to the untrained eye, by owning something rare that has a less advanced drivetrain and worse build quality than the comparable European and Japanese offerings.

Mustangs had to be brought over for a long time and they were very unusual in Europe. Now that Ford builds a model for Europe, I see them a ton here in Hungary. It's easy to spot them because they have the license plate section sized properly for European plates. I'm not sure when they started building Mustangs for Europe, but I'm pretty sure it was in the last few years.

This article talks about their popularity last year: https://media.ford.com/content/fordmedia/feu/en/news/2018/04...

> Now that Ford builds a model for Europe, I see them a ton here in Hungary.

Which doesn't change the fact that it's an aspirational "style over substance" decision for the majority of buyers, especially those buying the 2.3 EcoBoost version. Recently I also do spot them quite frequently in Bulgaria, but their resale value on the second-hand market is tragic, they lose something like 70% of their value in 3 years even with low mileage.

The Mustang has been easy to hate, but in Ford's defense, the latest gen Mustang is on order of magnitude better than any mustang from the 80's on. Independent rear suspension gives it actual handling, and after a tune that 2.3 ecoboost can put down over 300hp, and still get ~30mpg.

Given the price of a C class coupe or a base 911 vs a Mustang, there is a real value proposition, not just style over substance as you suggest.

edit: Also, if you can get a 70% discount on a 2016 Mustang, that's an outrageous deal. That's a lot of car for ~10000 USD.

At least in the American market, if you want the most horsepower per dollar, the Mustang is your best bet, particularly the 460 HP version. That is hardly “style over substance”.

The Subaru WRX has the same number of horse/dollars as the EcoBoost Mustang. Otherwise cars have quite a bit fewer horse/dollars.

Ford does pretty well in Europe overall but that's with their European-style compacts (Ka, Fiesta and Focus) which they stopped selling in the US last year. Their Transit van is still wildly popular. The Fiesta for example has been around since the 80s and the current mk8 generation is pretty popular.

I'd say they're a decent example of actually wanting to sell to car markets that's not the US.

"The decision to buy an American car outside the US is completely irrational and emotional"

To be fair, its also 'irrational and emotional' for most people in the US also.

Patriotism isn't really 'rational'[1], and while keeping jobs in America is rational, unless you work in the car industry, the benefits of buying the right car outweigh the job/tax loss.

This would apply to any country and any car industry BTW, I'm not having a dig at the US.

[1] theres probably many books on this subject, and there are a great many rational elements to patriotism. Buying a car, just because it says 'made in X', I would contend isn't one of them.

I don't think it has anything to do with patriotism in and of itself as this applies to most of everything. This $100 phone will cover literally 100% of my use cases in a 100% satisfactory fashion. This $200 (let alone $1000) phone will do the same. Let me think, I'll get the $1000 one!

Companies have convinced people, particularly in the US, that products are reflections of themselves. In doing so they've convinced people to engage in completely irrational consumer behavior on a very wide scale. $1000 phones for one group of people is the same as $300 sneakers for another group -- wasting money to try to convey an image. That $1000 phone has parts worth a few hundred bucks, the sneakers are made for about $15. It's only with extreme irrationality that these would ever be viable business models.

This is one of the big reasons I go out of my way to block any and all advertising. People don't think they're susceptible to advertising, yet look at society and people have become completely and absolutely irrational in their purchasing. I think it's clearly marketing and advertising driving this - patriotism is just one small subset of domains that is effectively targeted.

there are probably the points of availability (dealerships and the likes), support ("you can always find a spare for a local made car, but you may have to wait a month to source one from Korea"), and market distortion due to trade tariffs that make buying American cars in the US more rational than abroad.

I don't know if those are real issues, but I heard them mentioned.

Fords are a popular basic car in the UK. A Ford Mondeo (I think you call it Fusion) is the classic boring business car your employer might give you.

Teslas are very prestigious cars here in the UK as well.

Fords sold in Europe are mostly European cars (developed and build in Europe for the European market). They are smaller but in many aspects objectively better than most US models.

That doesn't make then less Ford

Why would Ford make the effort of producing Europe-only models if they didn't have problems selling the designed-for-America models in that market?

Fact is, American cars, designed and built for the American market, don't do well in Europe and other markets because the quality levels are sub-standard in comparison with the competition - especially in Europe.

Ford had to re-design models for sale in the European market because European consumers sniffed their noses at American cars - and rightly so, the quality difference between American and European designs really is quite obnoxious to buyers. American standards just don't stand a chance compared to European expectations.

The particular car op mentioned (Ford Mondeo/fusion) shared a platform with the Volvo S60 (I think) when Ford owned Volvo. So it was designed together with Volvo, and built in Belgium. So it does make it a bit less Ford.

I believe this is no longer the case with newer models since Ford spun off Volvo.

> In Europe it's mostly the posers who want to look rich to the untrained eye

what american car would give that impression? There are _some_ american style muscle cars but it's very tiny amount IME.

OTOH, I do think there are a few Ford cars which are popular in europe (the Focus comes to mind), and Jeep has always had it's modicum of market share (arguably, it's european at this point).

> what american car would give that impression?

The modern muscle cars, and the likes of Dodge Ram and Ford F150. Jeep is maybe the only exception.

The Focus and the GM Opels are what I consider European volume cars, targeted mostly for the European market.

The US has a 10% market share in China of all places (http://carsalesbase.com/china-car-sales-analysis-2018-brands...), and apparently it used to be higher. That seems pretty decent actually. I've heard that the Chinese market enjoys American cars quite a bit.

Let's not forget that Tesla is an American brand and is rather crushing it in certain non US markets such as Norway...

I think it's a fair assumption to say that Tesla is not like other American car brands and thus is not perceived in the same way by foreigners.

Anecdotal evidence: I've been involved in a few Tesla evaluations in Austria, and one thing that was common to all of them, conclusions-wise was "Tesla is a typically American car, but not your typical poorly-designed American car - just a bit better quality, in general, than your average American car" - but still, Tesla is not viewed anywhere nearly as high-quality in terms of production, as BMW or Mercedes-Benz models in this same market. People are only buying Tesla in Austria because of the energy factor - not because they prefer the design over what Mercedes-Benz can do. And the moment these European manufacturers start competing on energy features, Tesla becomes less palatable, except for those looking for that "counter-market American caché" ..

*cachet

Norway is a small market.

Mexico and a lot of Latin America countries are packed with US manufacturers cars.

The issues mentioned in the video is not new, and has been the case for decades, yet AFAIK there doesn't seem to have been much effort on the US side to adapt at all. The resulting perception is that US automakers don't really want to sell to Japan in the first place; well, that's fine if they don't, but then bringing it up as if it's a problem is baffling. You either adapt or you don't.

These companies dug their own graves in the early aughts and then the American government used taxpayer money to dig them back out again. They never learned to adapt because they can count on the government to be their nursemaid and their attack dog, in the form of tariffs and laws against upstarts like Tesla.

Well, GM held quite a few jobs (and industries) hostage. They had little IP worth buying, as they were already re-badging Australian and European cars. The latest Saturn's were Opel's. Pontiac's were Holden's. Down economy made it seem like no one would ever buy a truck again and Toyota had already proven their trucks were as good or better.

If GM wasn't bailed out, they would have failed HARD. Like, plant closes, which means in that town restaurants close, doctors offices close, tax revenue drops so public sector jobs suffer, suppliers no longer have someone to supply, so they cut back. There would have been a massive ripple effect in an already awful time. Don't forget about the rampant middle class foreclosures, middle class homelessness, college savings lost, etc. 2008-2010 was really bad.

Also, it was a loan that GM was able to repay and gov't made money on the deal on top of continued income tax payments from all the people who remained employed and off unemployment.

That outcome was not guaranteed. They could have failed anyway and it would have been twice as bad.

To be fair, it’s really rare to see any foreign cars here in Japan. However whereas i can spot maybe two or three european cars a day i think i’ve seen less than 10 American cars during my time here.

There's a measure of truth in what the video says. But explain for me why Tesla is only able to sell less than 300 cars a year in Japan? I know they just introduced the Model 3 there which should help.

Or do the Japanese view the Tesla as just another big car American company?

https://teslamotorsclub.com/tmc/threads/how-many-tesla-s-and...

Teslas are very big cars by Japanese and European standards. I suspect that is one of the main factors in American cars not generally selling well internationally.

Tesla are big by Japanese standards. They're not big by European standards.

They are expensive ($50k+) and unavailable, though.

I guess it depends on how you count "big". They're not exceptionally big, but clearly more in the size league of big Mercedes/BMW/..., which all are "big" compared to common "sensible" cars.

Model X and Model S and other cars in that class are wider than the current models of the VW Transporter van, and even longer than the short wheelbase model.

Tesla Model 3: 4690 mm.

Skoda Octavia: 4670 mm.

Skoda Octavia is far from an exotic car in Europe.

The real problem is this:

Tesla Model 3: starting price €46k.

Skoda Octavia: starting price €22k.

True, for some reason I was thinking more about the two larger models (probably because I've seen more of them around?) - and I have a very city-dwelling perspective on small being important.

The model S is very big by European standards too, they're sized like the bmw 5 series and mercedes E class, both of which are very large. The model X is by all accounts absolutely massive, like the range-topping volvo xc90.

The model 3 is sized pretty regularly though.

Well, they're big by UK standards. Maybe, I shouldn't generalise to all of Europe though my impression is that Europe, in general, trends to smaller cars on average.

Yes, but that's not why people don't buy Teslas. They don't buy them because they're 2x as expensive as the average car (or more expensive, even). They also don't buy them because Tesla can't build and deliver enough of them in a reasonable time frame.

pre model 3 cars are too big. won't fit in most parking spaces and even some roads

Does Japan have custom duties for imported cars? (I don't watch videos.)

I'm European and in market for buying an American car. It came as surprise for me that the price of Tesla includes several thousands euros of extra import tax, compared to European manufactured cars. This feels wrong, i.e. I'm being punished as customer/citizen because no European car manufacturer make attractive alternative for Teslas.

No they don't. They say so in the first few seconds of the video.

The video specifically said it was not due to tariffs, which are minimal to non-existent.

Buick sells between 1 and 1.2 million cars in China the last 4 years.

Who knew Buick would be made cool again by Chinese consumers?

Can someone with more time on their hands provide an TLDR?

[thanks for all the answers, it's super helpful :D )

- Image of American cars being unreliable gas guzzlers.

- Can't meet the Japanese buying experience.

- Vehicle size.

- No American kei cars.

However, US is arguing that removing some market barriers would help them increase their market share.

Chevrolet bought out Daewoo, and in a stunning display of branding prowess[0], in the UK at least, the daewoo Matiz is now the Chevrolet Matiz.

So that's a small 'American' car, small enough to be a Kei car

According to this there's also Pontiac and Holden branding :sigh: [1]

[0] when I think about Chevrolet, I think Chevvy V8s, 'Vettes, El Caminos, Camaros, big (1970s big) American pickups, and just general Americana, car culture, etc. NONE of those things are embodied in the Matiz.

[1] https://en.m.wikipedia.org/wiki/Chevrolet_Spark

In order to qualify as a Kei car in Japan, a vehicle must have a maximum displacement of 660cc and a maximum length of 3.4m. The current-generation Chevrolet Matiz/Spark meets neither condition.

South Korea, where the Matiz originated, has its own rules for gyeongcha (same meaning as Kei car) that allow cars up to 1000cc and 3.6m. The Matiz/Spark was designed for these rules, not the much stricter Japanese rules.

> Chevrolet bought out Daewoo, and in a stunning display of branding prowess[0], in the UK at least, the daewoo Matiz is now the Chevrolet Matiz.

> So that's a small 'American' car, small enough to be a Kei car

Nope, that's history for some years now. Chevrolet decided late 2013 to cut the mentioned small car business with former Daewoo in Europe and leave this field to their older (and now also sold) brands Opel and Vauxhall.

The only Chevrolets now sold in Europe are their so called "Iconic Cars" Camaro and Corvette.

Check the Wikipedia page I linked to, it's still being made, so if they wanted to they could ship them to Japan.

If your objection is to my use of the present tense, maybe? The Daewoo Matiz is no more, and is now currently known as the Chevrolet Matiz? I'm starting to talk myself out if it now though :)

I did try and send them a bill for my armchair strategising back when the change was announced, they never got back to me though.....

The only thing harder to sell in Japan than an American car is a Korean car.

American companies struggle to sell cars in Japan, due to big preference for compact cars (which they almost don't make anymore), different culture of buying (not sure how that is an issue really), and existing stereotypes of American cars being inefficient and low quality.

I agree with the “necessary evil” comment on the American car buying experience. Every time I go to the dealer, I feel like I’m going to be ripped off somehow. There is a perceived air of desperation that someone is going to get the chop if they don’t sell me a vehicle or service at some ridiculous markup. The post-purchase experience varies between a desperate cry to please help us help you and the occasional “do you exist, oh here’s a car deal that’s almost like the one you bought two months ago”.

Sounds like the Japanese have it figured out.

The reason for horrible American dealerships is known. Many states passed protectionist laws, which basically ban direct sales. Dealerships became mandatory middlemen, and they exploit this position by offering a horrible service - everyone has to come to them anyway. The fix is simple - just repeal all those obsolete laws, and it will naturally boost competition and increase the quality of service in result.

Tesla had to deal this kind of stuff in many states, in order to be able to sell directly to their users.

differences in built environment and land availability

Well said and if you are wondering the top three Japanese automobile brands have plants in the United States Indiana and Kentucky Toyota automobiles Columbus Ohio area Honda and Smyrna Tennessee Nissan. Also Indiana is home to a Subaru plant which makes the Subaru Impreza for sales here in the United States and exports them to Western Europe via a rail shipment from Indiana to Port Newark Port Elizabeth, NJ. Kei Cars if Euro NCAP tested 4 stars just look at Mitsubishi i-MiEV.

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