Japanese Auto Buyers Dump Costly Options Series: JAPAN'S AUTOMOBILE INDUSTRY. First of Three Articles on Japan's Automobile Industry. on Nov. 13: Auto Imports in Japan Multiply

By Paul A. Eisenstein, Science Monitor | The Christian Science Monitor, November 9, 1995 | Go to article overview

Japanese Auto Buyers Dump Costly Options Series: JAPAN'S AUTOMOBILE INDUSTRY. First of Three Articles on Japan's Automobile Industry. on Nov. 13: Auto Imports in Japan Multiply


Paul A. Eisenstein, Science Monitor, The Christian Science Monitor


THE Japanese call it kakaku-hakai, and literally translated, it means "price destruction."

But in another sense, it might be described as the sound that's made when a bubble bursts - the bubble economy, or false prosperity, that enveloped this island nation through much of the 1980s. That sense of abundance is gone now as Japan struggles to reverse its longest economic downturn since the end of World War II. And nowhere was the impact of this slump more apparent than at this year's Tokyo Motor Show, which ended this week.

"In the bubble years, people wanted the best," explained Chris Redl, Japanese auto analyst with Barings Securities in Tokyo. "Now they want the cheapest."

Five years ago, Japanese carmakers couldn't find enough options to load up their cars: power windows, heated power seats, dashboard-mounted television sets, and satellite navigation systems. But the consumers who toured the Tokyo Motor Show this year will be far more likely to skip the options and order vehicles stripped of all but the basics - if they order at all. Statistics show that motorists are hanging onto their cars an average 4.5 years now, up from 3.5 years during the days of the bubble.

"The market is stagnant {and} there is cutthroat competition," noted Honda Motor Company president Nobuhiko Kawamoto.

That competition is only likely to get worse. Of the 40 vehicles that debuted this year at the Makuhari Messe convention center, more than a third were imports.

"Ford and Chrysler have forced this trend," said Tadeo Takei, Nissan Motor Company's vice president for domestic operations. Ford passed on the benefits of a weak dollar by paring the price of its new Mustang last year. When Chrysler's Neon subcompact reaches Japan a few months from now, it is expected to boast a price of around 1.5 million yen (US $14,563). Similar Japanese products begin at 2 million yen.

Imports still make up a relatively small segment of the Japanese new car market, but sales are rising steadily, particularly in the wake of the recent US-Japan trade treaty. …

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