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Endgame: Which Japanese Carmaker Will Be Forced Out of the U.S. Market First?

The tragic earthquake/tsunami/nuclear disaster in Japan continues to damage the country's auto industry both at home and abroad. Toyota (TM) has said that it may not be back up to full production strength until the end of the year. Honda, Nissan, Mazda -- all facing the same challenges. But what about the smaller players? There's a very real chance that this could be the event that forces one of them out of the U.S. market.

Recovery for some, but not for all
We've grown accustomed to thinking that Japanese carmakers are by their nature as Japanese carmakers in better shape that their American, and even European, counterparts. But General Motors (GM) is resurgent, and Ford (F) has arguably never been in better shape. Chrysler is marching toward an IPO. Volkswagen is preparing to expand in North America. And we all know how the Germans are doing.

Toyota, Honda, and Nissan will be okay. They're each invested far too much in the U.S. -- not least by building plants all over the South -- to fade away. But Japan's own version of the Big Three aren't the only companies trying to sell cars here.

A rundown of the the rest
The other Japanese carmakers, and their relatively levels of success and failure, can be expressed as follows:

  • Mazda: A mere two percent of the U.S. market, but an established lineup of vehicles that competes in major segments: compact, mid-sized, crossover, and even a kind of hybrid wagon-minivan. Plus, consumers associate the cars with frisky, affordable performance.
  • Subaru: Slightly higher market share than Mazda -- 2.3 percent, achieved in 2011 and a record for the brand. Like Mazda, Subaru is well-defined brand whose vehicles are known for value, reliability, and ruggedness. Very popular in the snowy Northeast. Not going anywhere.
  • Mitsubishi: Less than 1 percent of the market, and trending down. Most prospective customer would be hard-pressed to pick its vehicles out of a lineup. Sales are good in other markets, so Mitsubishi could be headed out -- except that it operates a factory in Illinois.
  • Suzuki: Sold less than 40,000 vehicles in the U.S. in 2009. Market share could be considered a rounding error at under 0.5 percent. Still, before the quake the company said it was committed to staying. But its small-ish vehicles do far better in developing markets. Also, everyone in the U.S. thinks Suzuki only make motorcycles.
You'd have to say that it's between Mitsubushi and Suzuki, with Suzuki looking like the company that's not long for the states. Making matters worse is the impending arrival of Chinese autos, which will attack the small-vehicle market with a vengeance.

The story doesn't have to have an unhappy ending, however. Suzuki has a recently consolidated dealer network that could be appealing to an automaker that's looking to expand in North America. Volkswagen could take it over. Or a Chinese brand could use it to establish a foothold.

The counterargument is that it's essential to continue to do business in the U.S. once you're started. You know, if you can make it here, you can make it anywhere.

I don't buy it, not when your supply chain has been clobbered and fatter profits outside the mature U.S. market loom. You could say that we'll miss Suzuki when it's gone. But so few people own one of its cars that not a lot of folks would notice if it left tomorrow.


Photo: Wikimedia Commons
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