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Number 1 Shimbun

It's Tokyo Motor Show time - again

 

No1-2017-10 Kawamoto


It's Tokyo Motor Show time - again
by Roger Schreffler


Tokyo - In October 1993, Bob Lutz, a former top executive at Chrysler Corp., spoke at the club during the Tokyo Motor Show week. He complained about the Japanese auto market not being open.

This came as no surprise to anyone in the audience who had followed the running commentary from the U.S. dating back to the 1970s and the Arab oil embargo, which triggered several unintended consequences.

Among them: American consumers, stuck in lines at the pump, gave Japanese ‘shit boxes’ a look (shit boxes referring to how some in the U.S. characterized the first wave of Japanese cars to enter the market). By the time the second ‘oil shock’ occurred in 1979, resulting in more long lines at the pump, American consumers turned away from Detroit’s Big Three automakers to buy fuel-efficient cars (no longer a subject of derision) from Japan.

Then in 1985, the Plaza Hotel Agreement, which led to the devaluation of the dollar against other major currencies including yen, triggered a transpacific migration of Japanese automakers to the U.S. to build cars. It turned out, at least in the auto sector, that Japanese sales grew (combined imports and locally produced) with no significant Big Three gains in Japan.

Lutz, at the time Chrysler’s vice chairman in charge of just about everything related to cars including marketing, sales and product development, took the party line in delivering his message. The market isn't open.

One week later, as the show was winding down, Honda Motor Co. president Nobuhiko Kawamoto came to the club and was asked to respond to Lutz’s specific assertion that if the market were more open Jeep sales would be substantially higher. Jeep was Chrysler’s subsidiary.

Not missing a beat, Kawamoto responded by urging Lutz “to drive his cars around Japan and he would find the answer himself.”

Kawamoto delivered his zinger in almost perfect English. The audience laughed. Kawamoto was widely quoted. And more importantly, he was mostly right.

Big American cars, regardless of whether they were gas-guzzlers or had the steering wheel on the left side rather than the right as all domestic cars, were not suited for the narrow roads in Japanese urban areas.

Moreover, BMW, back in the mid-1980s, had largely debunked the myth that foreign carmakers couldn’t sell cars in Japan. Some could: the Germans. Some couldn’t: almost everybody else, although the trade imbalance with the U.S. was greater than the rest of the world combined.

It went on like this for another decade. The club even provided a platform for Andrew Card (four times), who went on to become George W. Bush’s chief of staff but in the 1990s was a spokesman for the U.S. auto industry.

Which isn’t the point of this report.

The 45th edition of the Tokyo Motor Show kicks off on Saturday, Oct. 28. It will run for nine days through Sunday, Nov. 5. Press and preview days will be held Oct. 25 through Oct. 27.

Whether or not the club lands any corporate VIPs is beyond the purview of this report. But one thing is almost certain, we won’t be hosting any luminaries from the U.S. since the Big Three sans Chrysler (now Fiat Chrysler Automobiles N.V.) pulled out of the Tokyo show nearly a decade ago.

Rightly or wrongly, the Tokyo Motor Show has lost some of its luster. This is no fault of the Japanese auto industry which still ranks among the best if not the best.

But following several decades of pounding, including by the current U.S. president, Donald Trump, the industry has gone global and shifted more than 60% of production outside Japan. This compares to less than 15% in the early 1990s.

As a result, another unintended consequence: Japanese automakers want to show their stuff in Frankfurt, Paris, Detroit and Shanghai. And if they want to promote an environmental car, Los Angeles is as good a place as any to do the unwrapping.

Tokyo also must now compete with other industry trade shows as consumer interest in electric cars and autonomous driving has grown. Thus, Nissan Motor Co. has been a regular participant at CEATEC in Japan and the Consumer Electronics Show in Las Vegas.

A bigger potential problem is changing demographics. Younger Japanese, unlike their fathers and grandfathers, are less interested in owning a car.

The first Tokyo Motor Show was held in Hibiya Park in 1954 when the Japanese auto industry was still in its infancy and names like Datsun, Prince Motors and Toyopet were prominent. Honda had yet to build its first car, and three-wheeled trucks by Daihatsu Motor Co. and Toyo Kogyo Co. (predecessor to Mazda Motor Corp.) outsold cars by a factor of three to one.

This year’s venue will be Tokyo Big Sight.

Expect to see Nissan’s new Leaf electric car and try to find out why it didn’t meet the competition (the Chevrolet Bolt) with respect to driving range. The Leaf came up short by more than 80 miles (128 km).

Or why Toyota, the world’s leading producer of fuel cell cars, still thinks it can sell 30,000 units - annually! - in 2020 or 2021?

And even with the Americans absent, most of Europe’s biggest names - BMW, Mercedes, Audi, Volkswagen and PSA - will be present. So will more than 90 manufacturers of components including all of Toyota’s major ‘keiretsu’ suppliers, still among the world’s best.

There are worse ways to spend a couple of days.

Published in: October 2017

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