Words of caution to Trump: Toyota Cavalier

by admin February 4, 2017 at 1:35 pm

From 1995 to 2000, GM offered Japanese buyers the Toyota Cavalier.

TOKYO — When President Donald Trump complains it is “impossible to sell cars in Japan” and promises action, it may be wise to remember a previous attempt to woo Japanese consumers.

Two words: Toyota Cavalier.

Toyota Motor Corp. executives — and many from General Motors — still cringe at the memory of the ill-conceived gambit to have Japan’s biggest automaker sell the rebadged Ohio-built Chevrolet small car through Toyota’s domestic sales network some two decades ago.

Refitted with right-hand drive and other tweaks meant to appeal to the Japanese, the Cavalier wasn’t the first American car to hit the Japanese market when it landed in October 1995, but it was one of the most-hyped ones of that era.

The symbolic deal was touted as the wedge that would finally pry open Japan’s “closed” market for American imports. Instead, it largely reinforced Japanese preconceptions about American quality.

GM funneled Japan-bound Cavaliers through a special finishing line at its Lordstown, Ohio, plant to ensure extra-rigorous quality. That did not stop Toyota inspectors from rejecting droves of the cars and sending them back for fixes before granting final approval for shipment to Japan.

GM and Toyota, erstwhile trans-Pacific rivals, had hoped to sell 20,000 Cavaliers a year in Japan through 1,100 Toyota dealers. But annual sales peaked at just 11,467 in 1996, the first full year of the experiment, even backed by a favorable dollar-yen exchange rate. GM finally canceled the deal in 2000.

The episode is instructive today because the Cavalier quest was widely sneered at as a transparent attempt by Toyota to defuse escalating trade tensions with the U.S.

How might Toyota react this time, as Trump pressures Japan again to open its market and criticizes Toyota for building Corolla small cars in Mexico for export to the U.S.?

For now, Toyota seems to be highlighting its contributions to the U.S. economy in the form of local production, now at levels all but unimaginable back in the mid-1990s.

Investing in the U.S. is one thing. Convincing Japan to buy more cars is another.

The quality and appeal of American cars has never been higher. But Japan’s market has largely moved on. Many buyers still love American niche nameplates. Think Camaro or Cadillac. Jeep has been selling reasonably well for more than a decade, cashing in on its rough-and-rugged Detroit DNA.

Pitching mass-market entries, though, is an uphill battle.

The Japan market is already swimming with competitively priced offerings from Japan’s seven major automakers that are perfectly tailored to local needs. Ford, after trying to compete with the likes of the Focus and Fiesta, finally quit Japan last year. Hyundai threw in the towel years earlier.

An image problem is as big a hurdle for Detroit as any “non-tariff barrier” in Japan. And as the Toyota Cavalier shows, even the backing of Japan Inc.’s favorite son can’t overcome that.

Source link

more news from the blog

Add Comment