Ford Looks to Increase Sales in Japan After Competitors Hurt by Earthquake and Tsunami

Some of the most gripping images that came out of Japan during its recent disaster were the piles of Japanese vehicles being tossed around like toys when the tsunami hit the eastern shores of the country.

Conventional wisdom holds that destruction on that scale can only do one thing for car sales -- boost them as people replace their vehicles.

But as Japanese auto giants, such as Toyota, Nissan and Honda, rebuild destroyed plants damaged in the tsunami, hampered further by the country's electricity problems, the auto manufacturers and suppliers are struggling just to meet domestic demand.

Ford sees this as a perfect opportunity to grab market share in Japan.

Ford Japan chief executive Tim Tucker said it probably won’t get another chance like this in a lifetime.

"The opportunities for Ford in Japan have never been greater," Tucker said Tuesday at a Tokyo cafe to highlight to the media the company's new products planned for Japan in the year ahead.

Ford will be starting from an extremely low base. Its total sales in Japan last year amounted to just 2,400 vehicles, a fraction of 1 percent of the overall Japanese auto market.

Seeing a foreign-built car on the roads in Japan is very unusual. Those that are seen are often the ones that are popular the world over, such as Mercedes-Benz and BMWs with a sprinkling of sports utility vehicles.

Ford is hoping its revamped Explorer sports utility vehicle will grab market share because the Japanese consumer may have to wait as long as December for a similar Japanese vehicle because of the production delays.

The fact that Ford made its announcement Tuesday in a Tokyo cafe was unusual. These kinds of announcements are usually made at the Tokyo Motor Show, which is held in November in the Japanese capital every two years.

But Ford, as well as Chrysler and GM, won’t be attending this year, a move that some attribute to cost. Estimates for a stand at the show can be as much as $2 million. Typically the Japanese car industry is in the spotlight, showing off their latest products with pretty women, while foreign companies are left on the sidelines.

The Tokyo Motor Show was once the premier show in Asia, but its future is now in some doubt as auto companies look at different ways to get their message across to the public.

Which could be the strategy behind Ford’s cafe event.

It would be easy to dismiss Ford’s hopes of an upturn in sales in Japan. American cars haven’t sold well there probably since before World War II. They have been regarded in Japan, as well as across Asia, for that matter, as clunky gas-guzzlers that are prone to breaking down.

But Ford is attempting to change all that with its new products.

Tucker says Ford is hoping to build the brand in Japan as "quality, safe, smart and green."

They include 50 new products over the next four years in the Asia-Pacific region and Africa. It has invested $4 billion dollars in these two regions since 2006.

And they are starting to reap the rewards of the investment despite strong competition from auto giants in Japan, South Korea and Europe.

According to Ford, in the Asia-Pacific region and Africa, overall sales increased more than 40 percent in the first nine months of 2010.

And they are not small numbers during that period. Ford sold more than 650,000 vehicles in those regions.

And if you break down that figure further, nearly 500,000 of those vehicles were sold in China and India.

Sales in Thailand are also doing well, and Ford is expanding aggressively with a new assembly plant due to be completed in 2012.

Ford believes 70 percent of its growth in the next 10 years will come from the Asia-Pacific and Africa regions.

If Ford is able to sell more imported cars into Japan, it would show it can compete in Toyota and Honda’s backyard.

But the reality is even if they boost sales by a few thousand, it won’t make much of a difference on the balance sheet as the fight for market share in the world has moved on to other markets like China and India, where the rewards look much more tasty.