Although the imported car market remains small in Japan, some foreign brands are still iconic and well known among car enthusiasts. Ford is one such brand – with its Explorer, Mustang, Escape and Lincoln models.
In 2010, Ford sold about 3,000 cars in Japan, but the company has exciting plans for Japan in the future, says Tim Tucker, president of Ford Japan Ltd. After graduating from UCLA, Tucker joined Ford and has now been with the automaker for 27 years. Prior to assuming current post a year ago, Tucker has worked in the UK, Israel, Vietnam, Malaysia and India.
Japan Today editor Chris Betros visits Tucker at the Ford office in Toranomon to hear more.
How would you describe Ford’s image in Japan?
Ford is perceived as an American luxury, near-premium brand. I think it has benefited from both the good legacy of Ford Motor Co and sometimes suffered from the not-so-good legacy of Ford. However, Ford does have some interesting iconic products with a long history in Japan.
Like most American autos, we used to have a reputation of big, lumbering luxury cars with poor fuel economy and sometimes not good quality. Ford began in earnest probably 6 or 7 years ago tackling the issues related to quality, such as fuel economy standards. Ford has really outstanding quality. But perceptions are another matter. That may take a little longer to change.
Ford is much more globalized now, isn’t it?
Yes. Even though we’ve been around for 105 years, we were never 100% globalized. Now we are, in the sense that we don’t have product development Europe, product development Asia, product development U.S. – it’s all global development. We now produce global platforms. We’ve learned a lot about how to improve quality in all our manufacturing plants around the world. We source from Europe for Japan; we source from the U.S. and we will be sourcing from Asia.
How do you market the brand in Japan?
Ford is still a very small business in Japan, along with most of the import manufacturers, except the Germans. We use a lot of direct mail, organize events and support for dealers who engage their customers. We do a lot of service activities. One of the areas that we try to focus on is social media – through the various sites, we can connect with consumers to let them know how they can take a test drive, where to find a showroom, who to talk to about the brand and so on.
How many cars did you sell in Japan in 2010?
Last year, we sold about 3,000 cars in Japan. Twenty years ago, we sold 80,000 a year. Our low point was 2009. We had been declining for a number of reasons. We were in business with Mazda where we essentially had rebadged Mazdas, sold to compete against the domestics for very little profit margin. There was never a winning strategy for long time. Ford didn’t really have a Japan strategy.
And for the future?
We are on track to have a bit higher volume in 2011. The most exciting thing now is a future product cycle plan, which will get us back on a growth path.
What models are you selling here?
Ford primarily sells SUVs in Japan – Escape, some Lincolns and the Explorer from U.S. We have a couple of iconic products like the Mustang. The Explorer is our best-selling model in Japan. We’ve been selling them here for 20 years and we’ve got 30,000 customers. We are launching a new one in September. It is the first major change in that product in probably 20 years. It’s gone from a frame-based truck platform to a sedan-type SUV. The dealers and media love it. The demand is very high in the U.S. It will cost between 4.4 million yen and 5.3 million.
Who are your buyers?
The demographics are 35-plus primarily because of the income range and their knowledge of Ford’s history. We have some loyal customers who have had Ford cars for 20 or 30, 40 years. We have some of the oldest dealers in Japan. There is one dealer in Sendai who is almost 100. His great grandfather started his company.
Do you sell any right-hand drives?
We sell one right-hand drive model, called Escape. It is assembled in Taiwan and sold in Asia. If you try to sell a right-hand drive Explorer to a customer, they wouldn’t buy it because it is an American product. They don’t want it changed.
So you are not just selling a car but an image?
There is generally an overriding brand image and focus and ours is on American lifestyle. And that’s how we market the brand and the product.
In Japan, does there tend to be a greater frequency of model changes or new releases?
Yes, more so than in most markets. One of the benefits of sourcing products that Japanese consumers want from Europe and the U.S. is that we can now benefit from the globalization and the increased frequency of model changes from the U.S.
Tell us about your dealer network.
We have 54 independent dealers, 10 company stores primarily in Tokyo and Osaka and 50 service-only dealers around Japan. With dealers, we look at their capabilities, experience and location – what the demand is and what we call through-put – how many vehicles we need to sell to make a dealership profitable.
Do you visit dealers often?
Yes. One of the things I like to do the most is visit the various dealers. I always have. I started out at the bottom of the food chain as a zone manager, spending 6 years in the U.S. visiting dealers every day. That’s the best way to learn about the business. I like to chat with customers. I equally want to hear concerns because consumers are very knowledgeable about our brand.
Is there ever an inventory problem?
We try to keep about 60 days’ supply in Japan. The new Explorer is being exported to 90 countries, so if there is a huge demand, it might take longer for delivery.
Do you adapt cars for the Japanese market?
One of the things we are working very hard to do is adapt our cars for requirements of the Japanese market. For example, Ford’s SYNC (a factory-installed, fully integrated in-vehicle communications and entertainment system that allows users to make hands-free telephone calls and control music and other functions using voice commands), My Ford touch – all of those need to come with Japanese language.
What’s happening with hybrids?
Ford has made a commitment to Asia and part of that is that we are rapidly globalizing hybrids, electric vehicles and we have the opportunity to bring those kinds of products into Japan when business conditions are right. Just a few years ago, that really wasn’t possible.
Is there much of a market for used cars in Japan?
The used car market is growing quickly and some of it was created by the disaster in March. Demand is probably at an unprecedented level. Resale values and trade-in values are high.
How many staff do you have here?
We have 54 people here, many long-term employees. I’m the only non-Japanese. We also have about 200 people at 10 dealers. As Ford is becoming more integrated in Asia, we have more Japanese employees traveling outside Japan for training. We provide incentives for employees to learn English.
Do you hire graduates?
We do. This is the first year in nearly 10 years that we will increase our head count. For mid-career hiring, we generally use an HR company.
Do your staff have to drive Fords?
No, that’s not a requirement. I use several of our cars, although since I live only 10 minutes away, it’s hardly worth the drive. I take part in ride and drives with media.
What is your management style?
Every market is very different and requires a little bit of flexibility in your leadership style. For Japan, because the team is so experienced, I generally try to give them a vision and general direction about where we need to go and set the priorities.
How do you like to relax?
I like to work out, run. I like to read and explore around Japan as much as possible.
The following questions were submitted by Inter FM radio personality Kamasami Kong.
Why should someone buy a Ford?
Ford has made tremendous progress in value for money, quality and safety, fuel efficiency. Ford is fully competitive now and for customers who are looking for other choices, Ford is a great brand to try.
How does Japan compare for Ford with other Asian markets?
Japan is a very small market. There are challenges with the costs of doing business in Japan compared to other countries in Asia. As a result, the import industry is probably 125,000 units. That’s small compared to any other market in Asia. China is our No. 1 market in Asia and India is probably No. 2.
How will power shortages affect people who want to buy a hybrid or electric vehicle?
The government is very progressive in terms of their desire to be able to support hybrids and electrics. Given the recent situation, that will be a big challenge. But the enthusiasm and desire are still there.
What was your first car? How old were you and what was the price of gas?
A 1956 Ford truck in East Texas. I was in high school. Gas was 25 cents a gallon.