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Thursday, November 24, 2005

The Japanese in Europe

As a foreigner living in London, I notice things that a native born person probably wouldn't. For instance there are an enormous number of Japanese tourists in this city. Japanese are very sophisticated dressers and almost never travel alone. The Japanese in their 20s dress in various wild punk outfits, many of the men have dyed hair that is spiked. In general they look very cool, and very trendy. Unfortunately I also see many American tourists. They tend to be overweight and our often loud. They also dress very conservatively.

As much as the Japanese love London, Europe does not necessarily love them back. Or at least love their cars back. Take this article about the slow acceptance of Lexus by Europeans. Living in London there are many people with money who drive flashy cars. Very few of these cars are Lexuses.

The article points to many reasons for Lexus's failure in Europe, but doesn't point out that in general most Europeans don't like Japanese cars. Why?

1. They were slow to adopt diesels into their lineup. This was a huge error by the Japanese. More than half of the cars sold in Europe are diesel.

2. Europeans are tradition bound. They are reluctant to buy cars that are not made in their homelands or are not European. The British are a notable exception but they still don't buy Japanese. Foreign to them is American.

3. Japanese cars have a reputation for being bland. In Britain Honda is considered an older person's car. In America Honda is an exciting brand. What happened? I think the American brands became so bland, that even Japanese brands outdid them.

4. Europeans treat their cars well and do not drive them very often. Cars are expensive over here and distances are short. A car purchase lasts longer than in America where cars are regularly thrashed and destroyed. The result is that the Japanese reputation for reliability is not as important and is ignored. Aesthetics becomes more important. European brands are always making exciting designs so this isn't a problem.

5. European brands are usually supported by their own governments. That means that Japanese cars have the odds stacked against them. This didn't happen in the US, or really with motorcycles. The Japanese dominate the motorcycle market in Europe and all markets in the US. Tariffs though prevent the Japanese from being super competitive in the EU.

So it is unlikely that we will see Europe become like the US with Japanese making huge inroads. In the luxury segment they are non-existent. In the passenger segment they have a presence, but it will take a while, if ever, for anything larger.

Sorry for the delay in updating, I am very busy and will speed things up in the next few weeks.

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