Luxury is only bet for foreign car firms

Tokyo businessman Randal Furudera isn’t about to swap his German-made BMW M5 for a “boring” Japanese car, although he’ll give them some grudging respect for their ho-hum dependability.

Deep-pocketed buyers like Furudera are driving sales in Japan of high-end foreign brands, which dominate the niche sector in a car market long seen as all but shuttered to overseas automakers.

“Most Japanese cars these days are sort of becoming moving appliances,” the 54-year-old said. “They’re very reliable, they’re good quality, they never break and all that, but they’re not very interesting to drive.”

Mid-range foreign vehicles are a rare sight on Japanese streets, but it isn’t hard to spot a Porsche zipping around the capital or a nouveau riche billionaire behind the wheel of a half-a-million dollar Lamborghini.

Sales of the Italian sportscar in Japan doubled to about 300 vehicles in 2015 from a year earlier.

The jump comes as US car giant Ford announced in January it was quitting the country, blaming the “closed” market, after it sold fewer than 5,000 cars in 2015.

Less than six per cent of the more than five million vehicles sold last year in Japan — the world’s number three car market —were made by foreign automakers.

US auto unions have blasted what they say are non-tariff barriers that shut the door on a sector already dominated by eight domestic carmakers, including Toyota, Nissan and Honda.

In 2013, former Ford boss Alan Mulally accused Tokyo of manipulating the yen’s sharp decline to gain a trade advantage for domestic firms, which sell millions of vehicles overseas, including top markets China and the US.

The imbalance hasn’t gone unnoticed by bombastic US Republican party frontrunner Donald Trump. “When did we beat Japan at anything ” Mr Trump said in a speech last summer to announce his run for the presidency.

But it’s a different story for prestige foreign brands, whose success didn’t come without a fight.

Nissan considered selling its high-end Infiniti brand at home, as Honda did with Acura. But those plans were scrapped ow-ing to foreign automakers’ dominance in the market.

German brands have slick marketing campaigns and a top-notch image in Japan, and rich drivers rarely switch brands so domestic automakers were late to the party. “There is quite a bit of prestige attached to certainly the three main German brands,” said Furudera. Foreign brands tend to focus on the driving experience, rather than just passenger comfort, added the car enthusiast.