I can’t say I saw this one coming, but recent reports suggest Toyota is willing to allow U.S. automakers to utilize its JDM dealer network to sell their vehicles. Don’t worry, I’m as confused as you are because this is definitely taking the “keep your enemies closer” proverb to another level. Make it make sense, you ask? Due to tariffs, Toyota is apparently considering every option to appease the U.S.
In 2024, the U.S. goods trade deficit with Japan was $68.5 billion, which was actually a 4.3 percent decrease from the previous year. However, with new U.S. tariffs imposed in April, global trade has been, to put it lightly, shook. Most nations received a 10 percent increase, but countries with which the U.S. has large trade deficits received higher increases. The Mainichi, a long-running English-language Japanese daily, reports:
“…nearly every nation in the world has been hit with a baseline duty of 10 percent, with Japan facing an additional country-specific tariff of 14 percent for a total rate of 24 percent.
Japan, meanwhile, has been affected by Trump’s extra 25 percent tariff on automobiles, along with other sector-specific levies imposed on national security grounds.”
That extra tax on autos and parts is the tasteless icing on the stale cake — no Japanese OEM wants that. Automotive retail news outlet CBT News said that Japanese automakers are expecting fiscal year losses in the billions, directly due to the tariffs.
“Japan’s auto industry is facing mounting pressure from a 25 percent U.S. tariff on vehicles and parts, a sector that accounts for 10 percent of the nation’s GDP and supports approximately 5.6 million jobs. Major automakers, including Toyota, Honda, Mazda, and Subaru, are bracing for a collective $19 billion loss this fiscal year due to the tariffs.”
So, time for trade negotiations and deal-making.
According to The Mainichi, in a corporate video released by Toyota, Chairman Akio Toyoda shared with Prime Minister Shigeru Ishiba that the company wasn’t opposed to letting the likes of Ford, GM, and Stellantis sell their wares in a local Toyota dealership. Another option on the table was reverse importing U.S.-built Japanese cars. The conversation occurred in May, during which Toyota’s Chief Technology Officer, Hiroki Nakajima, was also in attendance.
Per Bloomberg Nakajima said that U.S. car brands have 163 sales locations in Japan, but Toyota alone has more than 4,000 sites.
“‘When US manufacturers bring cars to Japan, for example, using Toyota’s sales network to deliver them is an option,’ Nakajima said.”
This, of course, is to be taken with a Himalayan-sized grain of salt. Added Nakajima, “…They didn’t say they would, only that it should be seen as an option.”
And it’s a crazy option to essentially let a competitor encroach not just on your home turf, but in your actual home. This could set a precedent. Stateside, dealer groups franchising competing marques isn’t uncommon, but they never sell them under the same roof. Maybe the same street or block.
How and where would Toyota dealers display their American rivals? Or would Toyota only allow U.S. brand models it has no direct market competitor, like a Ford Maverick? Toyota currently offers a compact pickup, but not a hybrid variant. What if Chevrolet sells more than Toyota that month? Will there be profit sharing? Will Toyota charge rent??
There are so many questions with no answers. Right now, the only certainty is that further trade negotiations between Japan and the U.S. will continue.
Top graphic images: Toyota; Ford; GM
So in the city in Japan, I used to live in there was a surplus of dealer locations and some just sitting abandoned but still owned. So it might be a way to utilize the dead locations and satisfy a financial burden and political burden.
In this case the JDM dealers probably see this as a relatively harmless way of giving the U.S a win,I would be surprised if this in fact does much to poach sales from the Japanese manufacturers anyway.
I mean sure open them up, I cannot see our vehicles being much a JDM threat with the crazy price of fuel in Japan, tight streets and registration/tax fees for a larger displacement engine. I’ve been to Japan before and the idea of navigating a full size pickup around regularly gives me a nightmare…
Gasoline in Japan is not cheap, but it’s not crazy. The price in Western Europe is crazy.
This morning I paid ¥164/litre for regular gasoline, the equivalent of $4.20/US gallon.
There are plenty of other reasons why current GM and Ford automobiles are not attractive to most Japanese consumers, including the ones you mentioned.
That’s actually not bad at all, I guess I had bad info thinking it was 2x the US. So I guess then having a small efficient car plus that (relatively) low fuel cost makes driving around not too crazy pricey? I also various of toll roads there, but also good roads correspondingly? At least around in Tokyo in 2004. Oh yeah one thing I found interesting was the, at the time, Astro/Safaris running around. I guess it was a thing for a period of time?
Yes, roads in general are well-maintained (although not road markings, for some reason) and toll roads in particular. The other advantage of toll roads (and no free street parking) is that car or train becomes a genuine choice. Train is usually cheaper for one or two people and faster, car is usually cheaper for three or more and gives you door-to-door convenience. You takes yer pick.
Astro vans really were a thing for a while. Maybe because, at the time, most Japanese minivans were relatively small, but the El Grande and Alphard came along, offering the choice of a bigger van with RHD.
“Stateside, dealer groups franchising competing marques isn’t uncommon, but they never sell them under the same roof. Maybe the same street or block.”
Near me, there is a dealer selling Ford, Jeep, Ram, and Chrysler under the same roof. Another nearby is selling Ford and Chevrolet.
When you get into small town USA, the rules may be a bit different.
“What if Chevrolet sells more than Toyota that month?”
In Japan!? Yeah, I don’t see how that could ever happen.
This is actually a smart move by Japan. It looks good on paper in trade negotiations without actually threatening their domestic automakers.
US cars don’t sell in Japan because US manufacturers make no effort to make cars that the Japanese public actually want to buy. The large vehicles that US manufacturers are good at making simply are not a fit for Japan.
Then there are the non-tariff barriers for even a vehicle like a Maverick. First they need to make a RHD version. Then make it meet EU emission and crash standards (Japan switched a few years back). All for a vehicle that is still too large for most Japanese buyers an not a fit for commercial use.
Nothing that is made in the USA would be a fit but Ford might sell them a few Romanian made Pumas.
Ford could sell the Maverick as the “Maverickei” in an half-assed effort to convince buyers it’s just a larger small vehicle.
There’s a reason American marques have pulled out of Japan, so Toyota’s comments are nothing more than disingenuous blowing of smoke.
“Stateside, dealer groups franchising competing marques isn’t uncommon, but they never sell them under the same roof. ”
Never say Never.
I believe it likely there are still a few holdovers from the days when it was not an uncommon practice to have unaffiliated marques under the same roof.
When we lived in Merced in the 70’s, we knew the Isenbergs of Isenberg Motors who sold VW, Subaru and Peugeot out of one building. He eventually sold his business and the new owners brought in Hyundai and later Kia to replace Peugeot.
When I came back to the states after my military service in the early 90s and moved to SF – My first job was at Martin Swig’s San Francisco Autocenter – Where we offered Nissan, Toyota, Mazda, Subaru, Suzuki, Isuzu, Alfa Romeo, Saab, Chrysler, Plymouth – and before my brief term there, Oldsmobile and Sterling – all in one building.
Of course Swig, being of the family who owned the Fairmont Hotel (Hence the CA Milli Miglia starting there), was not a good businessman – using family money to prop up his car dealer hobby (Which he used to service his personal fleet of vintage and new cars) He eventually sold his franchises and the crumbling Autocenter to a developer who made it into a strip mall- and the family sold their remaining interest in the hotel in 1998.
Wait wait. Beverly has moved from that other joint? Nice. Welcome to the future of automotive news, fun, and oddities. Sorry if I missed an announcement of some such.
I always did find it a bit odd that a new car dealer is brand specific. Like, why can’t I open a car dealer that sells new Rav-4a, Ford F150s, Tahos, and Chargers?
Because the manufacturers want dealers to be a certain way. If your dealer doesnt match their design, they allocate you less cars or even fine you.
There is an affinity among some Japanese people for American things precisely because of their “Hamburger, hamburger, bang, bang” Americaness. For a model like this to work, it won’t be by sending “better” vehicles in terms of quality or efficiency, it will be by sending cars that fit the Japanese ideal of what it means to be American. These cars will also need to contend with the reality of fitting Japan’s streets and parking limitations.
My list of cultural ambassadors would include:
In America, these cars are traffic. In Japan, they would signal wealth and rebellion. If you don’t believe, take a train ride north of Tokyo and count the G-Wagons parked in front of wealthy homes.
This right here, you will never compete with bread and butter vehicles in Japan. Just look at the Toyota Cavalier: https://hips.hearstapps.com/autoweek/assets/s3fs-public/AR-302069935.jpg?resize=640:*
Lifestyle vehicles probably will sell decently, just not at a high volume.
Jeep while having bigger competition in Europe, is still a fairly decent brand. And the S550 generation Ford Mustang, especially being made RHD, became a popular sports coupe (IIRC it was at one point the best selling “Sports Car” in Germany). Though the benefit is that they already had a dealer network in Europe already.
My favorite part of the Toyota Cavalier is literally a part, a Toyota badge with a GM part number: https://media.drive.com.au/obj/tx_q:50,rs:auto:1920:1080:1/driveau/upload/cms/uploads/VTQjfJTsRwiX6XYO10XS
That’s amazing
GM vehicles can be carried at as many Japanese dealerships as possible and it won’t make a difference because our vehicles are not suited to their market.
American manufacturers would have to develop entirely new products for sale there, and they may not be marketable back in North America.
The language and design aesthetic of the douchebag is global. In America, he drives a Lamborghini with the license plate, “BTC100K”. In China, he drives an Audi S7. With the right marketing push, in Japan he could be driving a Raptor R.
“. In America, he drives a Lamborghini with the license plate, “BTC100K”. ”
Nahh. We’re in an affluent neighborhood and near some very affluent neighborhoods (like houses with a helipad). Rich people have Lambos and other random stuff, but the car of choice of the douchbag is a blacked out Jeep of some sort (preferably Grand Cherokee) and/or Stellantis pickup with the lift kit, wheel spacers, and obnoxiously huge tires. Both cars seem to come from the factory with a thin blue line America flag or Punisher one.
These are the people who will weave in traffic as if they have an STI and driving skills to match or they’ll cut out of the carpool lane’s solid lines so they can cross three lanes of traffic to catch an off ramp because planning is apparently beneath them.
Douchebag culture is as diverse as as the rainforest in suppose. The breed I described lives in San Jose.
Ah, opposite coast.
Good point.
This isn’t new. Toyota has sold GMs before at their Japanese dealers, and not too long ago. I know they sold the Cavalier there.
I know it doesn’t feel like a long time ago, but it was like 25-30 years ago. That’s a pretty long time, and now I feel old.
I kept trying to put it into terms that made it seem less long ago. Everything I came up with still made it seem a long time ago (and made me feel old – which is age appropriate).
Um – This is nothing new.
Anyone remember the Toyota Cavalier?
How about the Toyota Voltz?
I wonder how the folks at Yanase feel about this potential encroachment of their business?
When I lived in Japan – The only people who drove new American cars were Yakuza.
Toyota Cavalier was exactly what came to mind. I can’t think of a GM car that would occupy that space now. Trax maybe.
Occupy the space under gathering dust?
Occupy the space of a worse version of a type of car they already make.
The Trax and Envista would be good candidates. They would be pretty large cars there and three cylinder engines are accepted more.
I think you’ve hit the nail on the head. The only people in Japan willing to buy foreign vehicles are wealthy and willing to be seen as tasteless outsiders. Assortment planning will need to be based on the loudest, boldest and dumbest vehicles have to offer.
Remember too that anything over 2.0L is heavily taxed in addition to high fuel costs in Japan – and American cars are large and noisy.
Japanese roads are narrow – parking is tight and expensive.
It’s not the Japanese way to blow money needlessly and make a spectacle of themselves.
“The nail that sticks up will be hammered down”
Every where I’ve been in the world has a wealthy subculture that wants dumb expensive things because of their impractical nature. It makes them rare and special. An Escalade in Tokyo will attract more attention than a McLaren or Ferrari.
Reminds me of this article, “Driving a Hummer on Tokyo Streets Takes a Battle Plan”.
https://www.wsj.com/articles/SB119360566073174132
When I was stationed in Japan in the very early 90s – I occasionally needed to drive from Yokota AFB where I was stationed to JASDF Iruma Air Station north of us.
What did I need to drive up there in?
A new GMT400 Chevy Diesel Stakebed – LHD, of course.
Why me? Probably because I was the bravest.
“loudest, boldest and dumbest”
Man, gonna be hard to choose. We (America) have that in spades.
I love the Voltz. A Toyota Matrix with some Pontiac flair to become the Vibe. Then rebaged backed to be a Toyota one again.
I think the key word in all of this is that American companies may get the chance to TRY to sell cars in Toyota dealerships, but based on years of failing to gain any kind of foothold in Japan I’m pretty sure JDM manufacturers don’t have much to worry about. Different tastes in different markets with not much overlap. I’m almost certain that even Our Lord and Savior DJT (barf) can’t convince Japanese consumers to buy F-150’s.
Yeah, the desire (or lack thereof) of American OEMs to sell in Japan isn’t mentioned. I’d have my doubts about their interest in all the work required to crack that market in any meaningful way. Is the juice worth the squeeze? Regulations, compliance, being right-hand drive, etc etc. It’s not like you can just show up in Tokyo with a boatful of Broncos and give ‘er a try.
they don’t have to be RHD, LHD is perfectly legal in Japan, and is even preferred amongst wealthy folks buying imported cars there.
Poking around this morning it looks like Corvettes and Cadillac SUV’s are about it right now – stuff with no real JDM competitor. I suppose Ford could make some headway since it still has a presence in small car markets like Europe, but I wouldn’t count on it.