Audi and Citroen are restructuring Japanese dealer networks and Land Rover will offer a full range of models in Japan for the first time.
All three European carmakers used the Tokyo auto show to unveil plans to increase Japanese market penetration.
At the end of last year, Audi sacked all its Japanese dealers. Since then, the German carmaker has been rebuilding its network with the aim of making the Audi brand identity more clearly defined in Japan.
'We had a very confused distribution network, selling through different channels,' said Fintan Knight, general manager of Audi's dealer development division in Japan. 'We now need to market Audi as a much more exclusive brand.'
Audi's former Japanese network was operated through three channels: one with Volkswagen, one with Toyota and the other through the Audi Exclusive chain.
At the end of last year, 244 dealer contracts were canceled. All Audis will now be sold through Audi Exclusive dealers. Around 70 have been appointed so far and that is expected to rise to 80 by the end of the year.
Many of the Audi Exclusive dealers were part of the former network but they will now sell cars through Audi-branded showrooms, either on exclusive sites or through separate showrooms on multi-franchise sites.
Audi sales slump
Audi's sales in Japan peaked at 17,000 in 1991 but have since slumped to about 8,000 a year.
'We now have a completely new model range and we are looking to attract back some of our former buyers as well as encouraging new ones,' said Knight.
Audi had been perceived in Japan as an upmarket Volkswagen rather than a brand in its own right.
'We now have the product lineup to alter that image and the changes in the dealer network will also reflect this,' said Knight.
Despite Audi's troubles, Volkswagen group sales are holding up well - not only in Japan but also throughout the Asia Pacific region.
'We have sold 350,000 cars in the region so far this year, which is up by 12 percent,' said Robert Buchelhofer, VW board member for sales and marketing.
'In Japan, where the market has been stagnant, VW group sales are 7 percent ahead, at 53,000. The majority of these sales, 47,000, are from the Volkswagen brand.'
Buchelhofer said VW group was on target to improve on last year's performance in Japan, when it sold 65,000 units. The New Beetle is proving very popular in Japan, he added, with sales of 1,000 a month.
Citroen, meanwhile, is taking control of its dealer network from Japanese distributor Seibu.
'I think Citroen is the only major global brand that is not represented by its own distributor in Japan,' said Francois Dembin, Citroen's director of international affairs, southeast Pacific region.
'We have had a very good cooperation with Seibu for 35 years, but this will change on April 1, 2002.'
Citroen urgently needs to develop its own brand identity in Japan, said Dembin.
'We agreed with Seibu that in order to establish the brand in Japan, it will be much more beneficial for the consumer if we go in our own right into the market as importer and distributor,' he said.
Citroen currently sells 1,300 to 1,500 cars a year in Japan.
'That's an extremely small amount and we hope to double our figures during next year, and go on increasing from there,' said Dembin. 'Our Japanese customers are people who want something different.'
That desire for something different is evident in the popularity of Land Rover's utilitarian Defender, which has developed a cult following in Japan - even though it has only been available as a gray import.
Now Land Rover - part of Ford's Premier Automotive Group of luxury brands - is launching the Defender in Japan next spring with the aim of undercutting the gray import market.
'Gray imports of the Defender have been selling for 5 million yen (E45,500),' said Land Rover Japan spokesman Christopher Ellis. 'We will launch the Defender in Japan at prices significantly below that.'
Ellis said it had taken Land Rover a long time to get the Defender homologated for Japan.
'The Defender is only available with a diesel engine and with manual transmission. A lot of work was required to meet Japanese emissions standards,' said Ellis.
To begin with, Land Rover plans to sell around 400 Defenders a year in Japan. 'These are small numbers but we expect the halo effect to be significant,' said Ellis.
With a full range of Freelander, Discovery, Range Rover and Defender models, Land Rover is targeting sales of around 3,500 a year in Japan. Last year, just over 1,000 units were sold.
Meanwhile, Jaguar - another Premier Automotive Group brand - said its new X-type has been well received in Japan. One thousand orders have been placed since the model was launched in September, and 400 X-types have so far been delivered to Japanese customers.