TIME: Almanac 1995

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<text id=90TT3016> <title> Nov. 12, 1990: World Of Business </title> <history> TIME--The Weekly Newsmagazine--1990 Nov. 12, 1990 Ready For War </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 63 WORLD OF BUSINESS Eskimos Do Want Refrigerators </hdr> <body> By Robert Ball If asked to name the world's fastest-growing market for imported cars, few people would give the right answer: Japan. Over the past four years, imports of foreign cars there have been rising at annual rates of around 35% in a generally stagnant market. This year the Japanese will buy more than 230,000 foreign-made cars; by 1995 the number could double, accounting for 10% of total annual sales and about the same level of penetration as Japanese carmakers now have in Europe. What may be news to the driver in the street is no surprise to European auto manufacturers: they planned it that way. German car companies, in particular, have cashed in on the new opportunity, grabbing nearly two-thirds of the business. Volkswagen-Audi leads with expected sales of 60,000 cars this year, followed by BMW, which should hit 40,000. Mercedes, which sold 31,500 last year, will be close behind. For these companies, Japan is rapidly approaching the importance of the U.S. market. In fourth place in the Japanese market is a dark horse: Britain's lackluster Rover Group, with sales of more than 10,000 cars in 1989 and prospects of 12,000 in 1990. All this is a far cry from the days when foreign cars faced a nearly insuperable series of Japanese roadblocks between dock and dealer. The Japanese government's new open-door policy has lifted the discriminatory tax, insurance and inspection regulations that once hobbled sales. Some European car executives even speak of "positive discrimination" from an officialdom that is eager to appear receptive. For boosting imports, BMW has won an award from the Ministry of Trade and Industry. Says Peter Woods, president of Rover Japan Ltd.: "It's a great market, and we're all making massive progress." Not so long ago, only gangsters and oddballs drove foreign cars in Japan. Nowadays in Tokyo showrooms, 1 car in 10 is an import. More than 300,000 Japanese drive Volkswagens; owners of the popular Golf model even have their own club. The import phenomenon signals a change in Japanese society toward greater individualism and more venturesome personal taste, for the typical buyer of a foreign car is a 37-year-old salaried employee. The enthusiasm of young Japanese career women for the Rover Group's Mini has given that venerable model a new lease on life. According to Yasuto Mizoguchi, president of Volkswagen Asia, "European automobile quality has always been recognized in Japan." The strong yen has helped bring prices within reach, but the European success is mainly due to hard work and heavy investment. BMW has gone furthest in putting down roots. It has built from scratch its own network of 120 dealerships and committed serious money to a big spare-parts center. At its vehicle-preparation facility, the imports are tuned and polished to the perfection that the finicky Japanese buyer demands. Says Hans-Peter Sonnenborn, president of BMW Japan: "Japanese customers are extremely image-, service- and quality-oriented, but if you meet their requirements, they are very loyal." Surveys show that 90% of foreign-car owners intend to buy the same make again. In short, for European carmakers Japan is becoming an export market like any other, only more so. Clearly a market in which a company can go from zero to a $1 billion-a-year business in less than a decade is worth the effort. And how are the U.S. companies doing in Japan? Not well. Total 1989 sales of the U.S. Big Three automakers combined were only about 3,500 more than Rover's. </body> </article> </text>