Japan is a notorious market for American automakers to make a dent in. Ford called it quits last year, while GM sells a meager number of models; Cadillac sold 327 and Chevrolet moved 373 models last year. Critics say "nontariff barriers" are the key reason as to why Detroit hasn't been able to make any headway. Talk with people in Japan and it is a different story, there is still a perception of American models having poor quality and having to fork out a fair amount of cash to keep them maintained.
But there is an exception. Jeep has been able to carve out a nice niche in Japan's marketplace. The brand is consistently in the top 10 of foreign automakers and sales have been climbing. 2017 is on track to be the eighth consecutive year of sales growth in the country. Through August, Jeep moved 6,344 models.
But getting to this point took a lot of work and money.
"We have to spend money and engineering hours to do it, but we think it's worth it," said FCA Japan CEO Pontus Haggstrom to Automotive News.
"They are things that make our jobs harder and make it more expensive and time consuming to bring cars to Japan. But are they trade barriers? My honest opinion is, no. Are they excuses for why I can't sell or succeed in Japan? No."
Jeep has been making efforts to make their models more appealing to Japanese customers.
- Tweaking drivetrains to qualify for Japan's eco-car incentives
- Offering right-hand drive models
- Equipping models with folding side mirrors and factory-installed Japanese navigation systems.
- Doubling their marketing budget since 2010
- Refurbishing or redesigning more than 50 showrooms by 2018
The last one is important as previous Jeep dealers in the country were basically what you find in dealers in the U.S.
"It's more about the brand and less about the origin," says Haggstrom.
Jeep also has an ace up its sleeve that many automakers wished they had, brand equity.
"The image of American cars as low-quality still persists here, even though a bit underserved. But Jeep has the most brand equity of any American brand. Japan shows it has a global following," said Christopher Richter, an auto analyst with CLSA Asia-Pacific Markets in Tokyo.
Source: Automotive News (Subscription Required)