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Old 12-30-2002, 08:51   #1 (permalink)
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Ford Japan's Future is in the Cars

by Mack Chrysler
WardsAuto.com, Dec 27 2002

TOKYO – It's not clear in Japan whether sales of imported Ford Motor Co. cars are on a new leg or their last leg.

Ford's plan is for Focus to lead sales in Japan.
Handicapped by a shoestring budget, Ford Japan Ltd.’s new president – the third in four years – is trying to create a new and improved image for vehicles that have never commanded much attention in the world's second-largest automotive market.

The auto maker’s peak year here was 1990, when sales totaled 86,726 unit. However, only 6,307 of these were imported Ford models. The remainder were Mazda Motor Corp. vehicles made in Hiroshima but badged as Fords.

Neither before nor since have import sales numbers been significant, topping out at 20,244 in 1996 and declining steadily since then.

"Many Japanese feel Ford means Mazda-made and we are trying to change their mindset," says President Katsuhiko Satoh in an exclusive interview with Wards.

To squeeze maximum mileage from every yen spent, the veteran of 25 years with Nissan Motor Co. Ltd., who took charge in May, has begun aggressively house-cleaning and overhauling the Japanese subsidiary.

Mazda-made vehicles, except for right-hand-drive Escapes, are being eliminated from the lineup. Also on the chopping block: the slow-selling imported Lincoln Continental and Lincoln LS; Galaxy minivans supplied by VW AutoEuroa Automoveis Ldta., a Portuguese joint venture with Volkswagen AG; and Spanish-built Ka cars.

This year, Ford Japan expects to sell 8,500 vehicles, down from 11,129 last year, which included 3,009 "sister cars" from Mazda. Next year, if all goes according to plan, total sales will sink to 7,500.

But almost all will be imports as the lineup shrinks to five main models: the European-made Focus and Mondeo, the Explorer and Mustang brought in from the U.S., and the RHD Escape made in Hiroshima alongside its twin, the Mazda Tribute.

"Long-term, the Focus should become our core product, but currently the Escape and Explorer are our main drivers," Satoh says.

Although the Japanese automotive market has matured and sales of both imports and domestic models have been flat for several years, Satoh is optimistic about prospects for a repositioned, rejuvenated Ford Japan.

With per capita income around $30,000 and huge domestic savings, "Japanese buying power is still strong," he says.

Targeted as prime Ford prospects are the sons and daughters of Japanese Baby Boomers, more than 20 million men and women from 25 to 35 years of age who are considered more independent and adventurous than their parents.

But Satoh describes the Japanese car market as one of the world's toughest, with some of the pickiest buyers in the world and competition so cutthroat that domestic auto producers find it hard to make a profit.

"Except for Toyota (Motor Corp.), Japanese auto makers have for many years offset huge domestic losses with profits in the U.S."

Satoh is encouraged by surveys indicating the Ford image here has begun to change for the better and is determined to maintain the momentum in spite of orders from hard-pressed bean counters in Dearborn to economize.

Although declining to reveal numbers, he admits the budget for advertising, sales promotion and marketing has been reduced "very substantially."

In an effort to remove dead wood, the distribution network has been slashed from 320 dealers a few years ago to 100 today. A campaign now is under way to encourage those in major centers to refurbish facilities with the emphasis on their Ford identity.

"We have renovated 60 and have 10 more to go," he says. But the money does not stretch far enough to cover the remaining 40 dealers in smaller markets.

“The productivity of Ford Japan salesmen, who averaged eight new vehicle sales each in 1999, should almost double this year to 15, and profit per vehicle is heading up as well. Profit, not volume, is our top priority."

Economizing has not dampened Satoh’s ambitions. With a selection of “pure Ford models,” he foresees more ups than downs in the future. This year, he expects Ford Japan to reach the breakeven point and is aiming for sales of 12,500 in 2005.

Yet even if this target is reached, few if any industry analysts in Tokyo are likely to notice or be impressed. One expert, who preferred to talk off the record, says there are only two popular import brands in Japan's small car segment – Volkswagen and Peugeot – and says the Fiat brand has failed, Opel is in the process of failing and Saturn is gone.

He is unenthusiastic about Ford's chances. "Ford Europe cars are competent and utilitarian but not distinctive and without brio," he says.

And with sales at levels more commonly associated with Third World countries, analysts here wonder why Ford bothers. "There might be grounds for a limited Ford presence in Japan if they sold differentiated models, but what does the Focus offer that Japanese buyers can't already get in a Japanese-made model?" says Chris Richter, senior analyst-HSBC Securities (Japan).

"With such low sales volumes, Ford would be further ahead using a car importer like Yanase (& Co. Ltd.)."

Agrees Steve Usher, senior analyst-J.P. Morgan Securities (Asia) in Tokyo: "I don't see a very exciting future in Japan for any U.S. auto maker, since they can't recast their product lineup to be more competitive
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Old 12-30-2002, 23:27   #2 (permalink)
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Old 12-31-2002, 02:24   #3 (permalink)
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Im no expert but ford could make a minor contribution in japan.

Using the BA falcon. If there has ever been a worthy Skyline or Windom competitor this is it. And its already avalible in RHD! Although it is a big heavy car and hence a instant outside the main stream market there are many redeaming features.

- Inline 6, 4.0L is possibly too big, perhaps destroking it to 3.3 litres (as the oz ford OHC inline was breifly sold in australia with) would be a suitable as atleast a option. Turbo inline six has been the perfered choice for previous Japanese cars, now with VCT and multivalves would have a suitable level of sophysication.
- Its avalible with auto or man transimssions on many models. Perfect for now carless "sport sedan" drivers, who could have previously purchased a 4 door skyline with 2.5L turbo and a 5 speed but now would have to opt for a 2 door coupe or a auto gearbox. Nissan only produces the skyline with auto transmissions. This and the use of the V6 were highly contentous issues for nissan, possible dissafected customers?
- I am unsure of LPG use in japan, but Hong Kong has been interested.. A certain green appeal. Driffrent to hybrid technology. Push its emissions performance instead of fuel costs/economy.
- Ford Falcon varients are definately distinctive. With lincons dead perhaps a small optitunity to have a seemly important luxury barge model.
- Small volume numbers initally would infact be benifical as Ford Australia is already tight capacity wise. It would be a interesting experiment. Australia has long been japans manufacturers dream, With toyota, Nissan, Mitsubishi all producing varients on japanese domestic vechical here. There is some synergy which has yet to be captured.
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Old 12-31-2002, 04:11   #4 (permalink)
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Yes but outside of Australia and the US no-one wants a big car like the Falcon.
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Old 12-31-2002, 07:07   #5 (permalink)
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Do you know what the Nissan Skyline sedan, Laurel, Cedric, Cima, President and Toyota Aristo, Crown and Celcior are?

Anyone could do with rear seats. Even the little Japs
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Old 12-31-2002, 14:51   #6 (permalink)
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Old 12-31-2002, 16:19   #7 (permalink)
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Obviously ford has zero chance of breaking into the small car market. The focus is good, but not good enought to tip off the japanese makers.

The XR6 turbo could add a legitamate halo car. Okay so your not going to sell 10,000 of them. But if your talking about ways to expand a total of 8000 sales. Hell wouldn't you try it?

I don't think everyone who bought a R34 GT 4 door 2.5l turbo 5 speed was doing a government purchase. Ive seen a few that have come over here with there japanese owners after they have relocated.

And its bull that all of them are government cars. I belive there is a 4 door performance scene in japan. there are many websites dedicated to such organisations, like the R31 passage club. Its not massive, but its there.

Its obviously a tough market, maybe even harder than germany (which by the way love big sedans and big cars.. ).. But it could be a worthy experiment to see how well they sell compared to the lincons. Given the Australian dollar, exports should be favourable. Profit per vechical would have to be reasonable?

Even if it was a complete failure, given Ford Japans current state, you have to say it looks pretty grim either way. If at a later time a new US made sedan(small) or EU made sedan made it into production, would japanese sales be viable.

The falcon certainly does not look to have Mazda made on it and would help make it appear very diffrent.
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Old 12-31-2002, 19:29   #8 (permalink)
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Yeo, in Germany they have V12 Mercedes Limos with a manual floor shift....AND W12 Audis that are coming to Australia in April.
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Old 12-31-2002, 21:26   #9 (permalink)
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BA XR6T in Japan

Yes I agree with a market the size of Japans there has to be at least 1000 people who would buy a XR6T. Keep the engine at 4.0 though - thats half the attraction.

After all it offers something that has been missing from that market but has all the sophistication and performance that buyers want.

The other way Ford could go is dump the ford brand and rebadge Ford models as Mazda's.

Obviously this cuts out the Escape but it would save money.
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Old 01-01-2003, 23:30   #10 (permalink)
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How many Falcons are sold as fleet cars over here?

Plus, I wouldn't think the cars would need any reengineering to comply with Jap rules. You could drive them straight off the production line here and ship them over to Japan. And if they don't sell, ship em back here where they will. The only expensive bit is marketing it.
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