Monday, 27 January 2014

Al AIn Japan

TOKYO -- General Motors has done surprisingly well in Japan's shrinking market, notching three straight years of rising sales. But a dearth of right-hand-drive vehicles stymies hopes for higher volume.

The redesigned Cadillac CTS and Chevrolet Corvette go on sale next year, promising another sales boost. But because both are left-hand drive, their arrival means there will be only two nameplates in GM's eight-model lineup with the steering wheel on the correct side for Japan, where cars drive on the left side of the road.

The outgoing CTS is one of the three current right-hand-drive models.

"To get to the next level, we really need a right-hand-drive portfolio, like BMW, Mercedes, Audi," Gregg Sedewitz, GM Japan sales and marketing director, said last week at the launch event for the CTS and Corvette in Tokyo.

"It's going to require somebody special to say, 'I love this brand. It doesn't matter.'"

After the redesigned CTS comes in April, GM's only right-hand-drive offerings here will be the Chevy Sonic small car and Captiva compact crossover.

Failing to configure American cars for Japanese roads is a stumbling block for Detroit brands trying to break into this notoriously finicky market. It's often a turnoff for Japanese, who can choose from a large selection of right-handers from European companies.

Yet for the Americans it's a chicken-and-egg problem. It's often not worthwhile to introduce a right-hand-drive version because sales are so low. And sales are so low in part because there are no right-handers.

Sedewitz said more right-hand-drive offerings are needed to break out of the niche level; GM sells barely 2,000 vehicles a year in the world's third-largest auto market.

But left-hand drive isn't always a deal breaker.

The current Cadillac SRX cross-over, also offered only in left-hand drive, replaced an outgoing version offered with right. But sales of that nameplate grew anyway.

"The product was so much better executed," Sedewitz said. "The ATS is left-hand-drive only. It's our No. 1 selling Cadillac. Yes, there's a limit to what we can do with left-hand drive. But it's a good foundation to take it to the next level at some point."

Japan's domestic auto market has been in steady decline for nearly two decades. Through October, 2013 light-vehicle sales fell 3 percent to 4,368,131.

Meanwhile, import sales are at record levels. Last year foreign car registrations reached 300,594, and through October sales rose 16 percent to 224,497.

GM Japan sales grew in 2010, 2011 and 2012. But so far this year sales of Cadillac and Chevrolet, the only two brands GM offers in Japan, are virtually flat at 2,241, according to the Japan Automobile Importers Association.

GM's sales are way below their peak of the mid-1990s, when the company was selling 50,000 cars a year, most of them Opels. But in 2006 Opel decided to stop selling in Japan and other non-European markets as part of a refocusing of the brand on Europe.

The 2009 bankruptcy further dented GM's Japan presence. GM has been a no-show for the past three Tokyo Motor Shows.

GM is banking on better products and a refined marketing strategy to build sales slowly.

The company is focusing on regional auto shows in such places as Nagoya and Osaka, instead of Tokyo. And it is revamping dealerships across the country.

GM has only 33 outlets, compared with more than 180 for BMW. But the eight-model GM lineup has been expanded from just four in 2010.

"We're in it for the long term," Sedewitz said. "It's not going to be an overnight process.

Source : Al Ain Japan