Why GM Continues to Struggle in Japan

Thanks to all the relentless press about the recall crisis, 2014 has been a rough year for GM in the media. Sales continue to be extremely high within the United States, though, as GM posted over 270,000 units sold in the month of August. However, one area where GM continues to struggle is selling in the land of the rising sun.

GM sales in Japan have been plummeting ever since they peaked in 1996 at 47,000 vehicles. In 2013 there were only 1,200 GM vehicles sold in Japan. In a recent interview with Autonews.com, Takeyoshi Ide, CEO of Yanese & Co., GM’s largest Japanese dealer, is not hopeful about the future.

“We are awaiting change,” Ide said. “I don’t think GM’s original people, from the United States, can make the change.”

During the peak, Yanese had 114 GM outlets under its watch. Today, that number stands at only 13. Further illustrating the point is the fact that Yanese accounts for nearly half of all GM products sold in Japan; however, GM is only 1.4% of Yanese volume. Yanese is also the number 1 Mercedes-Benz dealer in the country.

We are awaiting change.I don’t think GM’s original people, from the United States, can make the change. – Takeyoshi Ide, CEO of Yanese & Co

Ide explains that he believes a “lack of effort” is the main reason for the downfall of the brand in the Japanese market, and cites the fact that only two GM models carry right hand drive in Japan currently. “We have some customers who are interested in GM cars, but it’s a big turnoff,” Ide said. “We are waiting for right-hand drive. They have already officially announced that Cadillac is a global model. A global model means it will be sold in various markets globally. That means they need to develop right-hand drive.”

“If they would develop proper models suitable to the Japanese market, with right-hand drive, having sales of 5,000 units is not so difficult,” Ide explained.

Ide could very well be right. According to the report, Japan is still the third largest auto market in the world and high end brands including Audi, Mercedes, and BMW all posted gains for the first 7 months. Mercedes sold over 31,000 vehicles, whereas Cadillac sales dropped by 27% to only 425 units.