Japan’s Automakers Capture Greater Market Share In Europe

Japan’s Automakers Capture Greater Market Share In Europe

Japan’s automakers, strengthened by a solid range of fresh models, are boosting their sales in Europe and garnering greater market share at the expense of Volkswagen, Renault, Ford and General Motors. Europeans only need to look at the United States as an example of the strength of Japanese auto companies.

The Japanese, long renowned for high quality and efficient manufacturing systems, have now begun to compete with more stylish models well adapted to local tastes, embracing diesel engines and improving their dealership structure. Now they need to build up the strength of their brands to enhance loyalty and lure more new buyers.

Traditionally, Europeans have been somewhat more loyal to local manufacturers. But this attachment is slipping. Japanese automakers have been most successful in the U.K., where customers are less loyal to British brands which have been bought by foreign companies, but they have also made inroads on the continent.

Last year, Japanese carmakers increased their combined share of the western European market to 11.4 percent, up a whole percentage point from the previous year, according to European carmaker association ACEA.

Toyota, which has pumped four billion euros ($3.5 billion) of investment into Europe, aims to break even there in the fiscal year ending in March. It hopes to boost its market share to over five percent on sales of over 800,000 units by 2005, up from 755,600 last year.

Toyota Europe’s Executive Vice President and Chief Operating Officer Takis Athanasopoulos was quoted as saying he expected the company to reach that target a year early. The company aims to sell 790,000 cars this year, buoyed by the success of its medium-sized Corolla and small Yaris, Toyota’s biggest seller in Europe, at 235,000 units last year.

“The biggest challenge is to grow in countries where national brands are strong,” said a Toyota Europe spokesman. Following its success in the UK, the company is targeting Germany and Spain. Germany, Europe’s biggest car market and home to auto giants VW, Mercedes Benz and BMW, is renowned for being tough to penetrate.

Honda Europe, which will wind up its fiscal year ending in March in the black, expects its sales to nudge up to 210,000 in Europe this year from last year’s 196,000, and is also trying to enhance its brand image. It is also plans to introduce its first ever diesel engine to Europe this year, an important step given that diesels account for about a third of the European market and are expected to grow further.

Partnerships with local producers will also help the Japanese build up their expertise and tune into national preferences. Toyota’s joint venture with French carmaker PSA Peugeot Citroen to jointly build small cars in the Czech Republic will help it to tap local knowledge and keep a lid on investment costs.

Nissan, hoping to boost its 2.7-percent western European market share with its new Micra, will gain to a much greater extend from its alliance with Renault as it makes savings on purchasing and distribution.

COPYRIGHT 2003 International Trade Services

COPYRIGHT 2003 Gale Group