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No. 361, October 1999

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American Companies in Japan


TRANSPORTATION EQUIPMENT

Success in Japan hinges on a clear brand identity, executives of FORD MOTOR CO. have concluded. Accordingly, the company will phase out the sale of rebadged vehicles built by MAZDA MOTOR CORP., which the number-two U.S. automotive maker controls through a 33.4 percent stake. This decision, to be implemented by 2003, represents a fundamental turnabout in Ford's Japan marketing strategy since fully 70 percent of the nearly 22,000 Ford-badged vehicles sold there in 1998 were built by Mazda. At the end of the transition, the company plans to be selling seven or eight Ford-exclusive products, such as the midsize Explorer sport-utility vehicle, the Mustang sporty coupe, the new Focus subcompact car and the European-built Mondeo subcompact sedan. The lineup also will include a compact SUV that Ford and Mazda are codeveloping for world markets. Starting in the latter part of 2000, Mazda will assemble the right-hand-drive version of the truck in Hiroshima for both itself and its parent to market in Japan. While the two vehicles will share the same platform and engine, the Ford model will have a distinctive body. The switch in marketing tactics obviously will cost Ford sales over the near term. Some of its 200-plus dealer locations also could close because of the change. Management is optimistic, however, that in time, volume can be build up to 25,000 or even 30,000 units a year.

With no fanfare, DAIMLERCHRYSLER JAPAN CO., LTD. rolled out the redesigned Dodge Neon subcompact sedan. Company officials hope that the car's European styling and more luxurious look and feel will help sell this model. The original right-hand-drive Neon, which first appeared in dealer showrooms in May 1996, never lived up to the relatively modest sales projections for it despite aggressive pricing, at least at first. The new, upmarket Neon lists for $19,900, considerably more than its predecessor.

Five vehicles that TOYOTA MOTOR CORP. builds in Japan, including the Celica and the Crown, will be equipped with mufflers that incorporate OWENS CORNING FIBERGLAS CORP.'s Silentex muffler filling technology. The mufflers will be manufactured by FUTABA INDUSTRIAL CO., LTD., Japan's top maker of this product and Toyota's primary muffler supplier, and SANGO CO., LTD. Silentex mufflers use Owens Corning's proprietary Advantex high-temperature glass- fiber insulating material for improved efficiency, durability and acoustic performance. The Toledo, Ohio company tailored its glass-fiber materials and the muffler filling system to Toyota's requirements with help from the automotive maker and its two muffler suppliers. The Toyota contract marks the first time that Owens Corning's muffler technology has been applied in Asia.

HARLEY-DAVIDSON MOTOR CO.'s dealers in Japan now are linked to each other and to the motorcycle manufacturer's marketing subsidiary through a Web site. Dealers can use it to order parts and accessories and to check the inventories of other Harley retailers for particular products they need. In the future, the Harley subsidiary will use the Internet exclusively to provide information to its dealers.

An exchange rate of ¥108=$1.00 was used in this report.

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