Foreign cars close in on record-high market share in Japan

Foreign autos are poised to grab their biggest share of the domestic market for full-sized cars, about 7.5%, as Volkswagen AG and other manufacturers make inroads in Japan with fuel-efficient models.
Sales of foreign cars are likely to rise 8.8% on the year to about 243,000 units for the year ending March 31, 2013. Sales were up 10.7% in April to February, hitting record highs each month since September and accounting for 7.5% of all cars sold during this period.
Foreign autos’ previous record for market share, 7.3%, was set in fiscal 2011, when domestic production faltered after the March 2011 earthquake. In terms of volume, sales peaked at about 357,000 vehicles in fiscal 1996.
Foreign automakers are gaining traction in Japan by going small. Cars with engines of 1.5 liters or less made up 29% of the foreign autos sold in Japan last year, roughly double the proportion in 2008. Many now hold their own in fuel efficiency against domestic models. They are also narrowing the gap in price. Cars priced at US$40,178 or less accounted for 65.5% of the foreign cars sold last year, up more than 10 percentage points from 2008.
Gone are they days when a foreign-made car conjured images of big-ticket gas guzzlers. Volkswagen’s up!, released in Japan in October 2012, has a roughly 1-liter engine and a price starting at US$15,210. Mercedes-Benz Japan Co. rolled out a new 1.6-liter A-Class in January 2013 starting at US$28,992.
(March 25, 2013)