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00:00:02
>> US President Donald Trump can play golf all day with Japan's Prime Minister Abe, but his big issue with Japan isn't likely to get hashed out on the links. He wants Abe to help fix lopsided auto trade between the two countries. But the truth is big cars and trucks, the kind that America makes, don't sell in Japan.
00:00:20
Ford said last month it's pulling out of Japan entirely after only selling 2,400 cars last year. As Reuters Naomi Tajitsu explains, Japan's love for tiny cars is a problem for both sides.>> The Japanese preference for smaller cars is an issue that faces not only US automakers but Japanese ones as well.
00:00:39
For example, Toyota doesn't sell the RAV4 in Japan even though it's a very popular seller on the US market. Also Toyota only sells a hybrid version of it's Camry sedan in Japan even though the gasoline version of the model is a mainstay on US roads.>> With congested cities and narrow roads, many Japanese consumers would rather buy compact domestic vehicles than a big SUV.
00:01:03
There called Kei cars and many of them start at less than $10,000.>> This cars have 660 cc engines, there very very tiny. And they're used across all walks of life in Japan from delivery trucks to family cars. These cars are only manufactured by Japanese automakers and they enjoy a lot of tax breaks and incentives from the government.
00:01:27
So foreign automakers have argued that this puts domestic auto makers at an advantage. It's important to know that these are big sellers in Japan. Kei cars make up about one third of all cars sold in Japan.>> Japan's car market has shrunk so auto makers are focused on exports to the US and China.
00:01:46
On the other hand, one Toyota executive told Reuters, quote, it would take a painstaking fine tuning of vehicle specs for US cars to get traction in Japan, and that is nothing short of a 20-year effort.