Newspaper article THE JOURNAL RECORD

Japanese Map New Strategies to Protect Auto Market Share

Newspaper article THE JOURNAL RECORD

Japanese Map New Strategies to Protect Auto Market Share

Article excerpt

TOKYO _ After years of being portrayed as sharp-toothed predators out to get Detroit's Big Three, Japanese automakers now find themselves struggling to keep their share of the U.S. market from slipping further.

A one-two punch of the higher yen _ which has forced them to raise U.S. prices _ and tough competition from a resurgent U.S. auto industry has eroded the Japanese share of American car and light truck sales from 25.7 percent in 1991 to around 23 percent last year.

Despite efforts by Japan's automakers to stem the slide by cutting costs, stepping up U.S. production and introducing new models, analysts say the news is likely to get worse before it gets better.

"I don't think they'll regain the share of the U.S. market they once had," said Jonathan Dobson, an auto analyst at Jardine Fleming Securities. "It's a case of damage limitation."

After enjoying steadily increasing U.S. sales through the 1980s, Japanese car makers lost their two main advantages over American rivals in the early 1990s, first when Detroit closed the gap in quality and then when the yen shot up some 20 percent against the dollar.

Now, instead of costing about $2,000 less than comparable American models, Japanese small cars fetch on average about $2,000 more.

"From now on, it's going to be price competitiveness rather than quality _ which is hard for the Japanese to do now because of the higher yen," Dobson said.

Japan's big automakers have responded by speeding up two strategies already in progress _ drastically cutting costs and moving production overseas _ and trying out new ones such as aggressive leasing offers.

"Our overall plan is to make cars sold in most volume in regions where we sell them," said Toyota Motor Corp. spokesman Stephen Berkov.

Toyota said it saved $660 million in costs in the second half of 1993, and Honda Motor Co. managed to keep the price increase of its new Accord down to 1.7 percent.

Japanese manufacturers also are increasing the local content of the cars they build overseas _ a welcome development for American parts suppliers. Mitsubishi Motors Corp., for example, plans to buy engines from Chrsyler this year, boosting the local content of its U. …

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