German carmakers entice Japanese drivers with smaller cars

September 29, 2012


With the sales of European imports rising in Japan due to the weak euro, German automakers are making a push to woo Japanese drivers with smaller, more fuel-efficient cars.

On Sept. 18, the Japanese subsidiary of Volkswagen AG, the largest seller of imported cars in Japan, unveiled the VW up! compact that will be released to the public on Oct. 1.

Forty-five centimeters shorter in length than the Polo, the up! is the smallest car in the VW lineup.

The up! has a newly developed 3-cylinder, 1-liter engine and can travel 23.1 kilometers on a single liter of gasoline, the most fuel efficient VW the German carmaker has introduced in Japan.

It is equipped as standard with an automatic breaking function that reduces the risk of collisions.

VW said the up! will sell for between 1.49 million and 1.83 million yen ($19,100 and $23,500) to compete with domestically produced small gas-electric hybrids and upper-model minicars.

Shigeru Shoji, CEO of Volkswagen Group Japan KK, was confident about the new car at the Sept. 18 rollout.

“We will squarely challenge the small car market, which is crowded with rivals,” he said.

Shoji also said the up! will attract new customers who in the past have considered import cars beyond their reach.

VW is hoping to entice childless couples in their 30s and 40s who would be first-time German-car buyers.

Although Volkswagen has for years been the top seller among imported cars in Japan, it sold just 50,000 units in 2011.

“We are planning to raise our annual sales in the Japanese market to 110,000 units by 2018,” Shoji said.

Regarding the ever-shrinking Japanese market, “It is not a declining one for us,” he said. “If the barrier against imported cars is lowered, we will still have opportunities.”

In May, Mercedes-Benz released its new B-Class compact. The company set the vehicle’s lowest price below 3 million yen.

“We will promote the car to people who will own Benz cars for the first time,” said an official at Mercedes-Benz Japan Co.

An even smaller A-Class Mercedes-Benz is planned to be fully remodeled next spring.

Audi Japan KK, a subsidiary of Germany’s Audi AG, began marketing the entry-level A1 compact last year.

With a price tag of less than 3 million yen, it has been a hit among first-time Audi buyers, who account for 80 percent of the total A1 owners in Japan, an Audi Japan official said.

(This article was written by Ryo Toyoka, Satoshi Kubo and Hiroaki Kimura.)

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Volkswagen's up! compact (Hiroaki Kimura)

Volkswagen's up! compact (Hiroaki Kimura)

  • Volkswagen's up! compact (Hiroaki Kimura)
  • Shigeru Shoji, CEO of Volkswagen Group Japan KK (Hiroaki Kimura)

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