An Unusual Strategy Might Allow Fords and Chevys to Be Offered at Toyota's Dealerships in Japan | Carscoops

      While Trump desires an increase in American car sales in Japan, local consumers show little interest.

      Japanese officials are exploring ways to encourage President Trump to reduce tariffs.

      Toyota’s chief technology officer suggests that selling American vehicles through their dealerships is a viable “option.”

      Current tariffs may result in a total loss of $19 billion for Japanese car brands this fiscal year.

      The significant tariffs imposed on Japanese vehicles and products by the U.S. administration are expected to cost automakers billions, but Toyota might have a potential workaround. As Japan negotiates with the U.S. from a challenging position, it could propose assisting American brands in selling their vehicles directly through Toyota dealerships in Japan.

      The notion was initially introduced by Toyota’s CTO, Hiroki Nakajima, earlier this month. In a video posted on Toyota’s media site, Nakajima pointed out that U.S. brands have only 163 dealerships in Japan compared to over 4,000 operated by Toyota.

      “When U.S. manufacturers import vehicles to Japan, utilizing Toyota’s sales network for distribution is a possibility,” he indicated.

      In May, Nakajima brought forward this idea during a meeting between Toyota chairman Akio Toyoda and Prime Minister Shigeru Ishiba following recent negotiations with U.S. officials, as reported by The Mainichi. He mentioned that no final decision has been made regarding this potential strategy, emphasizing that it “should be regarded as an option.” Another possibility could involve exporting U.S.-made vehicles from Japanese manufacturers back to Japan, which could help reduce the trade deficit with the U.S.

      The Impact of Tariffs

      Japanese automakers are contending with various tariffs, and according to CBT News, the industry anticipates a collective loss of up to $19 billion this fiscal year. Significant tariffs include a broad 24% on all goods, as well as a 25% tariff on imported vehicles, steel, and aluminum. Japan exports approximately 1.5 million vehicles to the U.S. annually.

      Since the beginning of his first term, President Donald Trump has actively advocated for increased sales of American-made vehicles in Japan. However, his push overlooks the fact that Japan is significantly smaller than the U.S., has a higher population density, and features narrower city streets. Typical American vehicles are generally too large for Japanese roads, and local consumers tend to favor smaller, more fuel-efficient cars, which explains the popularity of Kei cars.

      Nevertheless, it appears that Japan acknowledges the necessity of accommodating Trump in some manner to negotiate lower tariff rates. If it entails Ford, GM, and other manufacturers selling cars through Toyota dealerships, then it is a route they are willing to explore.