Auto Makers: Japan (Part 2A)

When you think about car makers the US, UK, Germany, Italy, & Japan are the big names that come to mind. Of course the actual manufacturing is done all over the world no matter what parent company name goes on the final product or where it is ultimately sold.

It’s also true that a ton of cars are made by manufacturers other than the big 5 listed above. Many are even sold in large markets like the US but some of them are not sold outside there own borders. This series starts with the big auto countries but it won’t stop until we’ve covered every country that makes a car for sale to the public.

We started in Germany last month. Today we continue our dive the big 5 today with The automakers of Japan.

Japanese Car Making: A Brief History

To understand cars in Japan we must examine technology in the Japanese culture. Since the Royal Family of Japan determined culture Japan went through a long period of isolation where innovation was shunned and tradition was prized over all. Of course the rate at which technology changes increases exponentially so a visit from American Commodore Perry in 1853 jarred the Japanese with the realization of just how far behind they’d fallen. The next few decades of rapid modernization were challenging and the unspoken motto of it was, “we must catch up with the Americans.”

Even though we were on opposite sides of WWII the Japanese mindset around technology is inspired by American innovative ideas. Could Japan beat America at their own game. Many believe that it happened in 1970’s. The Clean Air Act (starting in the 60s) created the EPA (Environmental Protection Agency) which was charged with minimizing pollution from things like factories and engines. A standard to hit by a deadline was set and the price for not meeting that standard was losing the ability to sell your car in the US market.

The standards set by the EPA were so strict US auto makers went back to congress and begged for more time to create an engine that ran that clean. Japanese Automaker Honda was able to produce a car that met the standard by the deadline, and very nearly became the only car available to purchase in the US. Realizing the implication of this, Congress amended their legislation and gave US automakers more time.

Long Established Companies

One thing you will notice about the Japanese auto makers is how old they are. The combination of the long feudal/cast system with the rapid modernization movement forced companies in Japan to learn how to pivot to a new product very successfully. Many Japanese automakers were established long before anyone thought about replacing a horse with an engine.

Another interesting aspect of this is that Japan went from barely any production to large scale exporting of cars. The cause war broke out in Korea. America needed cars but was making tanks etc.  Toyota, Nissan, and Isuzu, became some of the biggest companies in Japan in one day, June 26, 1950. The result is that, while most countries count on domestic sales for a large part of their revenue, Japanese auto sales far exceed what they could ever sell locally. Not that the Japanese population is small, but their society is compact which makes individual car ownership a luxury unlike countries like the US with larger territory to cover.

In 1970, Japan took over the number one position when it comes to exporting cars–a position previously held by Germany. Japan has never come in less than first since. There is a threat to there position at the top. The Japanese Yen has been very strong against the US dollar, which makes their cars more expensive in their chief market, a market that has a strong ability to produce domestically in a pinch.

Toyota

Today, Toyota is regarded as one of the top auto manufacturers in the world, but they started out making weaving looms in 1890. They’re regarded as top in quality and safety, although they had a scandal over their breaking system in 2009 when the shipped out thousands of cars with a known issue in the brakes. In 2014 they were forces to pay out $1.2 billion not for the mistake, but for having covered it up. Still Toyota is the biggest deal in Japanese cars and that’s a big market to be the big fish in.

Lexus

Every manufacturer reaches a stage when they must make a strategic decision in regards to their target market. If they are performing well in their current market position, do they mess around with their current brand trying to get a larger slice of the pie, or do they start a new brand and go after a higher or lower price point. Toyota decided to create a luxury brand, Lexus in 1989, which has sold well in the US. The key was to target buyers of Honda’s Acura which had been outselling Toyota. The L400 did just that.

Suzuki

Founded in 1909 to make looms, Suzuki switched to Vehicles in 1952. Perhaps better known for their motorcycles, Suzuki makes several cars, which they export, ranking tenth overall in the world in 2011. Whether its because they seek to be a bit more diversified than Toyota or because they started out with a focus on small engines, Suzuki also produces ATV’s and outboard marine engines.

Mazda

Founded in 1920, Mazda began producing cars in 1940. There success in the US and around the world is in part due to a close collaboration with Ford. In addition to making cars under their parent brands, Mazda and Ford created the Autozam, the Efini, the Eunos, and the Xedos devisions–which you have no doubt never heard of. We’ll dig more into them in an upcoming post. Mazda may create luxury cars and family cars but what comes to the mind of most car enthusiasts when you say Mazda is “sports car.”

Honda

Founded in 1946, Honda is relatively young for a Japanese company. Like Suzuki, they cut their teeth on motorcycles. In 1969, while the US and Russia were battling for space, Honda made the jump to car making and has skyrocketed into the number 2 spot in the world. Though the battle for number two is pretty hot most years. Honda now makes about 20 models, but Accord, CR-V and SUV are their flagships.

Acura

As Lexus is to Toyota, so it is that Honda birthed Acura to go after luxury sport market without risking their mane brand. This division was born in 1986. It’s worth noting that the vast majority of Acuras are sold outside Japan. It may well be that Japanese who can afford to buy luxury connote foreign with luxury sport so they buy German.

Mitsubishi

Another more recent entry into the Japanese Auto Manufacture pantheon is Mitsubishi. Born in 1970, this company has grown into one of the world’s largest due in part to their collaboration with Daimler-Chrysler in the 2000’s. While Outlander and Lancer are their flagship cars inside the US, internationally their Pajero is one of the most recognized SUV’s.

Nissan

Founded in 1933, Nissan is a much larger car maker than most Americans might think. While they sell well in the us under the name Nissan, they’re part of the Renault-Nissan selling cars primarily in Russia and China. Nissan is known as an innovative manufacturer.

Infiniti

Just like Lexus and Acura, in 1989 Nissan decided to go after a higher market placement with a new brand. Innitially selling well in the US, Infiniti has grown to top sales in 15 countries. Nissan are not inexpensive cars to begin with, it’s hard to imagine they needed a top range offering, but it’s worked well for the company.

Subaru

Founded in 1953, Subaru joins Mazda and Mitsubishi as one of the newer Japanese car makers that wasn’t founded as a division of a previously well established Japanese car maker. Unlike Mazda and Mitsubishi who grew in large part due to strategic partnerships, Subaru has clawed it’s way to a large market share in the US the old fashioned way–by innovation and targeting a narrow niche. Subaru is best known for their boxer engine design, their symmetrical all-wheel drive, their rally cars and their turbo passenger cars. If you want the functionality of a truck, but don’t want to feel like a redneck, you’ll probably buy a Subaru.

Isuzu

Isuzu is the last car we’ll cover in the major Japanese car maker category, and in truth it’s total sales don’t rank it near enough to the top to cover it yet. However, it’s more of a household name in the US than several of those that outsell it internationally. It also deserves mentioning here as it’s unique.

Modern Isuzu was founded as a car company in 1934, well ahead of the 1950 Korean war boon, making it the oldest Japanese car company by two years. But of course the company predates that. They weren’t making looms. The original company, Tokyo Ishikawajima Shipbuilding & Engineering Co., Ltd., became interested in producing cars way before they reformed to do so. Their first car wsa built in 1916 and they began producing them commercially in 1922 (a collaboration with Wolseley Motor Ltd. of the UK) They were the first company to use diesel in a commercial car. The re-brand to Isuzu Motors Limited came in 1949.

In Conclusion

That’s it for now. Stay tuned for part be part B when we dive into some of the lesser known Japanese car manufacturers.

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