Japanese Carmakers to Sell Larger Vehicles in U.S.

Jan. 8, 2005; Kae Inoue writing for Bloomberg reported that Toyota Motor Corp., Nissan Motor Co. and Honda Motor Co. are aiming to sell more pickup trucks, sport- utility vehicles and so-called crossovers in the U.S. this year to increase their shares of the world's largest vehicle market.

Toyota, the world's largest carmaker by market value, will unveil its Lexus RX330 sport-utility vehicle and at least four other models next week at Detroit's North American International Auto Show. Nissan will unveil a prototype of its Infiniti Kuraza sport-utility while Honda unveils its Ridgeline light truck, the carmakers said.

``Japan's automakers will probably keep expanding their U.S. market share because their new models won't disappoint,'' said Naohiko Sasaki, who helps manage the equivalent of $3.5 billion in Japanese equities as co-head of investments at Kokusai Asset Management Co. in Tokyo.

North America contributes up to 80 percent of operating profits every year for Japan's three largest carmakers. The larger vehicles they sell in the U.S. are roomier, come with more powerful engines and are designed to appeal to the preferences of U.S. drivers.

Japanese carmakers together grabbed a record 30.5 percent of the 2004 U.S. vehicle market, up 1.5 point from 2003, according to New Jersey-based Autodata.

They are gaining at the expense of General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler unit, whose combined market share fell 1.5 percentage point to 58.7 percent, Autodata said.

New Models

Toyota's attractions at next week's Detroit auto show are its Lexus GS 470 model, the Lexus RX 330, the Lexus LF-A sports car, its redesigned Avalon sedan and an unnamed crossover vehicle. A crossover combines the features of a sport-utility vehicle with the size of a sedan.

Nissan will showcase at least four new models, including the Infiniti Kuraza, the M luxury sedan and a small concept car.

Tokyo-based Honda will showcase at least four models, including the Ridgeline pickup truck, the Acura RD-X prototype, a small concept car and a so-called hybrid version of the Accord sedan that runs on gasoline-electric engines.

Crossovers

Toyota, Mazda Motor Corp. and Fuji Heavy Industries Ltd. are preparing to release crossover models. Sales of crossovers have doubled in two years to about 850,000 units in 2003 from 2001.

Mazda, a third-owned by Ford, will unveil the MX-Crossport, a crossover concept, which combines the features of a sports car with a sport-utility vehicle. The model would be Mazda's biggest in North America.

Japan's fourth-largest carmaker will also unveil the Mazda5 minivan to be released globally in 2005. Fuji Heavy, 21 percent owned by General Motors, will also show the seven-seat Subaru B9 Tribeca sport-utility vehicle. The B9 will be Fuji Heavy's largest vehicle model in the U.S. when it's released in the first half of 2005.

Mitsubishi Motors

Mitsubishi Motors Corp., with its two-year decline in U.S. sales, will unveil two new models. They include the Raider pickup truck, the company's first pickup model in North America since 1996. The Raider will share parts such as the chassis with the Dodge Dakota model made by Chrysler.

In addition to introducing more vehicles in the U.S., Japanese automakers are expanding production in North America to shield themselves from currency swings and to cut delivery times. Greater local production has also decreased the political pressure they were under in the early 1980s, Toyota's President Fujio Cho said.

U.S. Production

Japanese companies produce about 20 percent of the cars they sell in the U.S. market. The remainder of the sales was exported from Japan, according to former Honda Chairman Yoshihide Munekuni. That's a higher amount than the 1980s, when every Japanese car sold in the U.S. was made in Japan, a ratio that accounted for about 19 percent of total sales in the market, he said.

Toyota plans to raise North American production capacity by opening factories in Mexico to make pickup trucks next year.

Honda will boost its production capacity in Alabama by 56 percent to 280,000 units this year. Nissan opened a new factory in Canton, Mississippi in May, 2003.

``Whatever the currency rate does, we need to overcome this issue,'' said Honda's Senior Managing Director Satoshi Aoki in December. ``We try to make products in the country where we sell them and that's probably the best way.''

Mazda, which produces at only one site in North America, is trying to increase its utilization of the plant jointly operated with Ford in Flat Rock, Michigan.

Mazda makes Atenza/Mazda6 sedans and wagons, producing 83,314 units in 2003. That brought the plant's usage rate to 35 percent. Ford started making the Mustang sports car in 2004.