Hummer don’t hurt them: Are Japanese consumers allergic to big cars?

July 14th, 2011 by Philip Brasor & Masako Tsubuku

Problem solved!

This fall, General Motors plans to start selling a “small car” called the Aveo in Japan. Though the company only expects to sell a few hundred, its purpose is to make the Aveo a “feeder model” that will prepare Japanese consumers for more upmarket models down the line. It will be interesting to see the reaction, since American car companies have never been very successful selling large numbers of cars in Japan.

Apparently, GM is thinking along the lines of fighting fire with fire. Small Japanese cars have sold like hotcakes in the U.S. ever since they were first imported there in the early 1970s, so it follows that Japanese prefer small cars, and GM will give them what they want. But the major appeal of import cars in Japan is based on image, so GM’s competition is not Toyota-Nissan-Honda, but rather Mercedes-Volkswagen-Audi.

A Japanese person who wants to buy a small car is not going to buy one from GM, because the average Japanese doesn’t equate GM with small cars. If GM actually wants to compete in a realistic way then they have to compete with something that’s quantifiable, like gas mileage, regardless of the size of the car.

In that realm, America still lags. The Wall Street Journal reports that all cars sold in America will have to get at least 24 kilometers per liter . . .  by 2025. Right now the American standard is about half that. Of course, gas mileage has always been the Japanese strong point, regardless of the price of gasoline. This situation was the basis of a bizarre news item last year. In February 2010, after the government had started offering rebates for so-called “eco cars,” ostensibly to promote conservation but mainly to prop up the domestic auto industry, the Ministry of Economy, Trade and Industry added 15 foreign models — mostly American — to the list of cars eligible for eco car rebates, and one of them was the Hummer H3-V8, the huge gas-guzzling military transport vehicle made famous by Desert Storm and Arnold Schwarzenegger.

Understandably, a lot of people were perplexed: How on earth did the Hummer qualify as an eco car? The explanation was that the Hummer’s gas mileage had “improved” a great deal. Given that the mileage was found to be 5.7 km/liter, it must have been pretty bad in the past. Most likely, METI added the Hummer to the list in yet another attempt to placate American trade negotiators who still couldn’t understand why Japanese people weren’t buying more American cars.

The Hummer may seem as if it’s beyond the pale (¥8.5 million new; about ¥3 million used), but the fact that there are Japanese companies that import it proves that there is a demand for the vehicle. Again, the general feeling that American cars don’t sell in Japan is due to the attendant belief that all American cars are big, but that’s also the appeal to certain consumers, and, in fact, bigness may not be as much of an economic problem as it used to be.

Take parking, for instance. Tokyo, one of the most expensive cities in the world to live in, actually has reasonable parking rates compared to other capitals. In a 2009 survey, a real estate research company named Colliers found that the most expensive city in the world for parking was London (US$1,020 a month), followed by Amsterdam ($805), Hong Kong ($748), Sydney ($733) and New York ($550). Tokyo was next at $525, just ahead of Zurich ($515). Of course, you’d have to be crazy, or crazy rich, to keep a Hummer in Tokyo, and for sure there are certain roads in Japan where you just can’t drive one, but if GM really wants to sell cars in Japan, they have to show a little more imagination.

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6 Responses

  1. Why on earth would any sane person living in Japan want to own a Hummer?
    There are already plenty of studies out in the rest of the world, why people buy huge cars. The answer has always been obvious…
    People with an inferiority complex compensate that usually with a huge car to show off. Cynics even say that buying a car like that is a need you feel, when you are afraid that one particular part of your body is too small. So, at least on the outside, you will want to have something that is so big, that no one will dare think “small” looking at you. Also lets face it… for a bodybuilder the use of steroids is a MUST! And the result this will have INEVITABLY on one’s penis is a sad, scientific fact.
    Basically, unless you are just that little bit retarded, you will never get the idea to buy a Hummer….
    Let me give you another hint. It is not a coincidence that this is an american car…

  2. To say GM is comparable to Mercedes, etc. is a bit disingenuous. Those companies are foreign, but have “Brand Image”. GM will be seen in the opposite day, more as a budget model for those who can’t afford Toyota, etc. Since the general preference is for smaller size, it makes sense that that’S what they should sell. The size issue hasn’t usually been a economic issue either, it’s simply rational. Buying and using larger cars than one needs is wasteful on many fronts – whether one can afford to waste or not, waste is a bad thing for society, and larger cares make the road a more dangerous place.

  3. I couldn’t get into my neighborhood without someone guiding me and couldn’t park at my house if I had a Hummer. Also gas is too expensive and Japanese know that US cars are far inferior to Japanese in terms of reliability.

  4. To the author,

    You assert: “Most likely, METI added the Hummer to the list in yet another attempt to placate American trade negotiators who still couldn’t understand why Japanese people weren’t buying more American cars.”

    Could you be so kind as to provide the reader with any evidence for this assertion? (Other than, of course, the link you provided, which contradicts what you said.)

  5. John Grey,
    From the tone of your post it seems as though you’re the one who is insecure about something. My advice is not to worry about what other people drive. If they want to throw their money away on something you think is foolish, more power to them. Lord knows we all buy things that other people would consider a waste. (This from the owner of a work-a-day domestic car.)

  6. Obama forced GM to shut down the Hummer unit of General Motors in 2010.

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