Ford Fiesta back in Japan despite past failure (Update)

Jan 09, 2014 by Yuri Kageyama
A man looks at a Ford Fiesta compact car in Tokyo Thursday, Jan. 9, 2014. Ford's Fiesta compact is back in Japan despite failing a decade ago in a market dominated by Toyota and other powerful local brands that specialize in small cars. (AP Photo/Koji Sasahara)

Ford's Fiesta compact is back in Japan despite failing a decade ago in a market dominated by Toyota and other powerful local brands that specialize in small cars.

Japan Ford President Toshio Morita, unveiling the 2.29 million yen ($22,900) model Thursday, declined comment on trade barrier and currency manipulation allegations being voiced by Ford Motor Co. headquarters in Dearborn, Michigan, and other U.S. automakers.

The complaint is that Toyota Motor Corp. and other Japanese manufacturers get an unfair advantage in selling their products in the U.S. while U.S. makers are denied equal access in Japan.

Japanese automakers say they are competing fairly, but are relieved the dollar is strengthening as a result of aggressive Bank of Japan policies designed to weaken the yen.

Ford has struggled in Japan and stopped selling the Fiesta after selling just 2,800 of them from 2004 through 2007. The Fiesta is one of Ford's top-selling models, with more than 720,000 sold worldwide a year.

Last year, Ford sold 3,500 vehicles in Japan, about half of them Explorer sport-utility vehicles. Even that number is a triumph for Ford, which has managed to increase Japan sales every year for the last four years.

General Motors Co. has also said it is trying to beef up its business in Japan, although it barely sells 1,000 vehicles a year here. It showed off a new Cadillac and Corvette last month in Tokyo.

A TV cameraman films a Ford Fiesta during a press conference in Tokyo,Thursday, Jan. 9, 2014. Ford's Fiesta compact is back in Japan despite failing a decade ago in a market dominated by Toyota and other powerful local brands that specialize in small cars. (AP Photo/Koji Sasahara)

Although Japan's 5 million-vehicle auto market has languished in recent years, last year was a record year for imports at 280,540 vehicles, comprising 8 percent of auto sales, according to the Japan Automobile Importers Association.

American automakers have long suffered an image problem in Japan as making only lemons. And Japanese manufacturers enjoy a loyal following in this nation, whose economy depends on the welfare of the likes of Toyota and Honda. Toyota controls about 40 percent of the Japanese auto market.

The best-selling models for the year in Japan, announced Thursday, show the Toyota Aqua at the top, with more than 262,000 sold, followed by the Prius, Honda Fit, Nissan Note and Corolla, in that order—all small cars. The Aqua and Prius are gas-electric hybrids.

Exchange rates have been moving favor of Japan exporting to the U.S. and elsewhere. A strong yen erodes the value of overseas revenue when translated into yen, a big drawback for the Japanese. But the dollar has soared lately to about 105 yen, compared with about 90 yen a year earlier.

Still, Ford officials were hopeful.

"This is for those who might want a different kind of compact," Morita told reporters at a Tokyo cafe displaying the Fiesta, which goes on sale here Feb. 1. "Our business in Japan will become stronger."

Instead of dwelling on the larger trade issues, Morita and other Ford officials stressed the Fiesta's efficient 1.0 liter engine called EcoBoost, "kinetic" exterior design and trademark driving performance.

Ford will also introduce the EcoSport sport-utility vehicle later this year, bringing to eight the Ford models on sale in Japan, including the Mustang and Focus.

"We want to work on what is under our control," said Morita. "We think we have a chance."

Yoshiaki Kawano, auto analyst at IHS Automotive, said imported cars in Japan are becoming smaller and coming down in price, like the Fiesta.

"People buying imports in Japan before used to be lawyers and doctors," he said. "Now we have a new breed of younger people, who have money to spend from stock investments and entrepreneurship."

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