U.S. President Donald Trump has repeatedly claimed Japan’s auto market is closed. Japan has rejected that claim, saying it does not impose tariffs on U.S. auto imports nor put up discriminatory non-ta

If Trump makes the accusation, the onus is him to provide evidence. If he can't provide evidence, he's full of it.

And seeing the kinds of parking spaces Tokyoites and other urban folk in Japan have to deal with, I don't think it's all that surprising hardly anyone buys American cars here.

Are we talking about US cars only, or are we talking about foreign cars in general?

@katsu78 - He (Trump - The Toddler-in-Chief) is full of it anyway !

Are we talking about US cars only, or are we talking about foreign cars in general?

Isn't it clear enough from the article asking the question?

And seeing the kinds of parking spaces Tokyoites and other urban folk in Japan have to deal with, I don't think it's all that surprising hardly anyone buys American cars here.

Not all American cars are big, plenty of domestic cars are bigger than some American cars.

Being mainly LHD is a problem for some and another is that quality, performance, handling and specification is lower (or perceived to be lower) than some other imports or domestic models. The market is not closed, far from it, other importers do very well selling their whole allocation here every year, year in, year out.

I think its more that American cars overwhelming until recently just don't suit many other countries which don't have cheap gas and mega highways.

This isn't a dig at American cars as such, just they are for a different market, if they made some to suit others then it might change and slowly has been.

I regularly visit the states and the most popular domestic cars/trucks there simply don't fit in the vast majority of Japanese streets and carparks, besides which the other sedans and cars are often Japanese, Korean or European.

"boo who let the free market talk, unless it doesn't suit me...."

When I first arrived back here, I noticed the Japanese cars were more pricey here than in the USA. I also noticed that American cars (and other foreign vehicles) cost more than their sticker price back at home. More by thousands of dollars.

Genuinely Japan has zero import duties on cars. There really are no barriers or tariffs non or otherwise to import and sell foreign-manufactured vehicles. I have just imported two classic British cars a 1967 Mini Cooper and a 1965 Jaguar E Type.

The costs of customs clearance, was 100,000 yen, I was able to wavier consumption tax, I had to pay a 40,000 yen carrier charge, there was 350,000 yen emission inspection/mod and 400,000 yen for registration and vehicle tax, the cost of container and specialist packaging £2700.

The problem for US car manufactures is the market here is highly competitive, over 90% of vehicles sold are small in comparison to the US market, 40% are minuscule, 1000c or under. I use a Honda for day to day use that would not look out of place in Hobbiton. it's dwarf like in stature, takes a calendar to get to 0 to 80 Kph loaded with shopping.

My grandfather says that American cars were everywhere after the war. And so were Ameican gas stations. So what happened? It would help if US car makers actually made a car that Japanese like. 3 or 4 years ago when the yen hit 76/dollar, they could have made a killing by reducing their prices, but they didn't.

My Hummer won't fit on the little back alley roads in Japan. Guess that could be a barrier. I know I wouldn't want to drive it unless I was playing Godzilla in a movie.

Plus the only American car I know that would fit is a Ford Festiva, which isn't exactly a "great car", unless there are 20 clowns getting out at a circus.

My experience. I priced a Chevrolet Corvette in the US at $65,000. The same car with the same features in Sapporo would cost 11,000,000 yen or approximately US$98,000.

You see them every now and then, but German, British, and Italian cars completely dominate the US imports. Not even the French cars compete very well here. I have noticed some Tesla stores popping up though

Isn't it clear enough from the article asking the question?

If we are talking about protectionism, then we cannot only talk about US cars. If the same kind of barriers are levied against European cars than it becomes protectionism. If its only US cars than it is not. Having said that, I HATE having to side with Trump on ANYTHING, but he's right on this one.. (I can't believe I just said that)

Let's not forget that Japanese car makers built factories in the US and are responsible for employing 1.5 million people in the US.

And let's not forget that the US has a tariff on imported autos and even a 50% tariff on pickup trucks.

And let;s not forget that Japanese companies export more cars from the US to the rest of the world that they import into the US.

There are no alternate facts to the above.

everything qwerty said is the truth and you vote it down. what a strange place.

Most of the cars you see in Japan are domestic Kei-type with engines less than 1000cc because this is what most can only afford. Anything above 1000cc or larger than Kei type means you're in the better off income bracket.

Also, the current crop of American cars are not suited for mass market in Japan... They are niche fashion statements (american muscle). European brands still have the luxury import dominated though.

Japan has the stronger argument, but unfortunately Trump has the stronger arm to flex. There IS protectionism here like you would not believe, but until the culture changes and stops thinking whatever it produces is superior, whether it is or not, you'll never see an increase in sales of US autos unless it's forced.

This is all a no-brainer for all the arguments mentioned above.

The same debate raged in the late 1980s when lots of the trade barriers here were removed (not just for cars but for lots of things like food and clothes) a large part to US Republican government pressure. Obviously cars were a point and some congressmen found some old corrollas and banged them up wit sledgehammers in front of the Capital Building in Washington DC to make a point, which did not go down well on the old News Station program here.

At the same time, quality for US-made cars was an issue plus their simple inappropriateness in Japanese roads and neigbourhoods. Conversely it is like a Suzuki Move on a US interstate - a Chevvy or a Camry (most popualr car there isn't it, or so I read) would work better there.

Trump is just a generation too late with the the automobile card - I am afraid he is trumped there.

smithinjapan JAN. 31, 2017 - 02:44PM JST but until the culture changes and stops thinking whatever it produces is superior, whether it is or not, you'll never see an increase in sales of US autos unless it's forced.

Detroit-3's best hope is to just carve a niche.

Forget mass marketting razor thin margin soulless pleb-mobile and start selling "American lifestyle" products with justifiable high margins like Muscle cars and SUVs to impressionable & fashionable rich Japanese clientle! Look, Japan knows that Harley Davidson is the Rolls Royce of motorcycles. If Harley Davidson can thrive in Japan, why not Detroit-3? All they need to do is just double or even triple down on "American-ness" (in style, substance and attitude). There's definitrly room for 'murican Hellcat-powered Charger and Escalades with "TwentyFO" mag wheels!

The most exhaustive piece I have read on the subject (couple of years old tough). Seems Trump's wrong.

http://dailykanban.com/2015/01/japan-closed-market-world-managed-import-360000-foreign-cars/

In Japan, for regular cars, the auto tax is assessed by the total engine displacement as measured in cc's. Most U.S. cars have large displacement, over 2,000cc and above, they are taxed heavily in Japan. It's a way to discourage people not to buy U.S. or foreign cars.

Trump complains Japanese don't buy American cars at all. I just wonder what's good about American cars first for Japanese/Japan? What I know at least is I had never seen TV commercials of American cars when they had their dealers in Japan. On the other hand, I have seen many Japanese commercials very often in US.

My parents (the bankers) told me that during the 80s (I was just a kid), some US persons actually complained that one of the non-tariff barriers of the Japanese market was that it was in Japanese.

That's probably about the annual financial statements that are required to be translated in Japanese for them to enlist on the TSE.

Basically they still have a master mindset thinking what they do is right and going out of the ordinary is waste of money not think for once that you have to satisfy the customers for them to purchase the product.

I drove the first Saturn sold in Gunma, it was a nice car but started to rattle and be unpleasant after 5-6 years. Went to Mazda, which I love with a passion, for the next 4 cars. Now I drive a BMW.

I'd say the market is more or less open but there are a number of regulations in Japan that have the potential to distort the market. The most obvious is the need to undergo a rather expensive vehicle inspection every 2 or 3 years. It's hard to see this as anything other than a sweetheart deal for automakers since people often buy a new vehicle rather than sink more money into the 'shaken'. It creates artificial demand that disproportionately benefits local automakers. If you're a foreign automaker who competes on quality and reliability, the financial incentive to keep buying newer and newer vehicles just to avoid the shaken could erode your main competitive advantage. But this probably affects more European rather than American automakers.

M3: I'm pretty sure that all vehicles in Japan have to go through inspection every 2 years... not just foreign cars.

@Tahoochi. Yes, all cars have to be inspected but I think you may have missed my point. The average age of a car on the road is now 11+ years in America, 9 years in Europe, and only 7 in Japan. So Japanese manufacturers need only concern themselves with designing and building a car that will survive around 7 years (or less). If people were not financially punished for keeping older cars, they might buy fewer cars overall (which would increase the Japanese automakers fixed costs per unit) and they might opt for cars which are built to last longer (which could be foreign since longevity is something which is more commonly expected in foreign markets).

The fact that people are pushed to support Japan's No.1 industry like this also seems like an unfair trade practice under the guise of safety regulation. It would be like the French government passing a safety regulation requiring anyone who opens a bottle of wine to drink it all within 6 hours, or else pour it out (and buy another bottle).

Here's an article from way back in 1993 talking about the same issue. It's not a new complaint.

http://www.nytimes.com/1993/09/12/world/why-the-cars-in-japan-look-just-like-new.html

M3M3M3

One problem with your theory many in this thread vouch that Japanese cars last longer then foreign competitors. Basically it's not a non-tariff barrier since Shaken applies to all car whether it is domestic or imported and follows the same inspection for all cars. Japanese cars has a strong reputation for longevity so any argument on that part is basically void and moot from the start.

The European carmakers have a long list of grievances against Japan. Their market share is under 5%, and blame it on Japan's many non-tariff barriers. This was a major issue during the EU Japan free trade talks.

The European carkmaker's argument has very little substance in showing what they call non-tariff barriers are and shows their two sided argument in which they protect their market with an actual tariff to their own market.

It is the sole responsibility of the importer to develop the dealership network no other's.

If the importer can't lure partners as dealers it's their problem not some imaginary non tariff barrier. It cost around 10 billion yen to open an outlet. If the importer can not show concrete financial scheme on how their partners are able to recuperate their investment then they should not be in the business in the first place.

What would the average Japanese person want to drive around in? Look around at what they are driving now - small city cars or people carriers (or MPVs as some call them). The Japanese produce vehicles tailored to Japan, American cars are tailored for bigger spaces.

European cars tend to be the luxury vehicles like Beemers, Mercs and supercars... with the odd Mini or Fiat 500 chucked into the mix.

trade barrier lies in the dealership networks

It doesn't sound like a government thing. If a non Japnese car company wants to establish a big dealership network I'm sure the Japense government would be fine with it. It's just that the companies wanting to do this will have to provide the capital and lots and lots of it. They would have to create a huge organization they most definitely would not be willing to do. But don't fret. There are successful American enterprises. We have Apple, Disney, Universal, Microsoft, P&G, others. No point getting obsessed over cars. It's just one sector. And don't forget that Boeing sells a plane or two in Japan.

The average age of a car on the road is now 11+ years in America, 9 years in Europe, and only 7 in Japan. So Japanese manufacturers need only concern themselves with designing and building a car that will survive around 7 years (or less).

A dozen US states - frighteningly - have no mandatory car safety inspections. How does this impact the data? Europe mandates car inspections and exports its used vehicles to the south and east; Japan has a healthy export market in RHD countries for its second hand vehicles.

If you're a foreign automaker who competes on quality and reliability

And Japanese brands don't? What's with this 15 years-old kei truck with 1.4 million km on the clock?

http://www.goo-net.com/usedcar/spread/goo/19/700110090030170201002.html

Here's an article from way back in 1993 talking about the same issue.

The shaken system was much more punitive back then, but lets also remember that people had a lot more cash, too, and keeping a car for three years was the norm for many (although Japan is far from unique in this)

I don't recall when the system was overhauled, but it's much cheaper these days, and do-it-yourself shaken is also possible.

When all is said and done, Trump fails to look at his own country's policies before barking at others. The U.S. has several tariffs in place to tax imports for one reason or another.... one of those reasons being as absurd as any tax out there: the Chicken Tax.

"one of those reasons being as absurd as any tax out there: the Chicken Tax."

The chicken tax is not absurd at all. the 25% tariff ensures that US made trucks rule US roads, providing steady profits for Detroit and lots of good jobs for Americans. Japan's auto industry would have been dead on the ground if not for its series of steep postwar tariffs.

People slamming tariffs have zero knowledge of economic history.

JeffLee: The Chicken tax was initially Lynden Johnson's retaliation of France and West Germany's ban on American chicken. The income from the tariffs imposed on dextrin, potato starch, brandy, AND light trucks were supposed to off-set the loss in export sales of chicken. It was later revealed that Johnson included light trucks in the retaliatory tariff for political gain by answering to the UAW's demand to curtail the strong sales of imported Volkswagen trucks.

So yes, the Chicken tax was meant to protect the Detroit 3 as you say, and that is exactly why I think it's absurd in this day and age with global trade, AND when Trump points his finger at Japan for allegedly trying to "protect" its auto industry when the US has been doing it since the 60's and continues to do so today.