Article: JAPANESE CARS PILING UP 20 PERCENT PRICE RISE SLOWS SALES; ANNUAL EXPORT QUOTA MAY NOT BE MET WAYNE SCHENK WANTS TO BUY YOUR CAR. ''I BELIEVE I CAN OFFER YOU MORE MONEY FOR YOUR CAR AS A TRADE-IN THAN PROBABLY ANY OTHER NEW-CAR DEALER IN ALL OF NEW ENGLAND,'' SCHENK SAYS IN A LETTER TO SELECTED CAR OWNERS. THAT'S NOT AN UNUSUAL COME-ON FOR A CHEVROLET SALESMAN, BUT IT IS A VASTLY DIFFERENT APPROACH FOR A NEW-CAR DEALERSHIP THE LIKES OF HONDA ON COMMONWEALTH AVENUE IN BOSTON, WHERE SCHENK IS GENERAL MANAGER. SCHENK, WHO HAS BEEN IN BOSTON FOR ONLY FOUR MONTHS, SAYS THE LETTER HE SENDS TO CAR OWNERS ENCOURAGING THEM TO TRADE IN THEIR MODEL FOR A HONDA IS WRITTEN IN THE SAME FORMAT THAT HE USED IN FOREIGN CAR-FRENZIED CALIFORNIA TO SELL BUICKS. IN RECENT YEARS JAPANESE CAR DEALERS HAVE BENEFITED FROM THE COMBINATION OF STRONG DEMAND AND THE SUPPLY-CONTROLLING VOLUNTARY RESTRAINT AGREEMENT. BUT WITH THE PRICES OF JAPANESE CARS HAVING RISEN 20 PERCENT AS THE YEN APPRECIATED 60 PERCENT AGAINST THE DOLLAR SINCE OCTOBER 1985, THE JAPANESE AUTOMAKERS ARE IN DANGER OF NOT REACHING THE LIMITS OF 2.3 MILLION CARS THEY ARE ALLOWED TO SELL IN THE 12-MONTH PERIOD ENDING THIS MONTH. LIKEWISE, DEALERS FACE THE PROSPECT OF FINDING THEMSELVES -- ALONG WITH AMERICAN CAR DEALERS -- WITH MORE CARS THAN THEY CAN SELL. JAPANESE CAR SALES FELL 5 PERCENT IN THE FIRST THREE MONTHS OF THIS YEAR, AND INVENTORIES LEAPED TO A 61-DAY SUPPLY, MORE THAN DOUBLE THE RATE LAST YEAR, ACCORDING TO AUTOMOTIVE NEWS, AN AUTO INDUSTRY TRADE PUBLICATION. MEANWHILE, JAPANESE AUTOMAKERS AND THE AMERICAN DEALERS WHO SELL THEM HAVE FOUND THEIR PROFITS AND COMMISSIONS DEFLATING. NISSAN MOTOR CORP. POSTED A NON-CONSOLIDATED OPERATING LOSS FOR THE FIRST HALF OF ITS FISCAL YEAR, ENDED IN SEPTEMBER 1986, WHICH MARKED THE COMPANY'S FIRST SUCH LOSS IN 37 YEARS. SUBARU OF AMERICA, THE US-BASED MARKETER OF THE JAPANESE AUTOMAKER, HAS ALREADY FORECAST A DOWNTURN IN PROFITS FOR THIS YEAR. WHAT ALL THIS MEANS IS THAT THE SALE OF JAPANESE AUTOMOBILES IS BECOMING A BUYER'S MARKET AND JAPANESE AUTOMAKERS ARE IN FOR A STRUGGLE. ''EVERYBODY IS GETTING SQUEEZED. EVERYBODY HAS TO MAKE SURE THEY ARE DOING THE BEST THEY CAN,'' SAID DAVID KOHL, A TRANSPORTATION SPECIALIST AT THE UNIVERSITY OF MICHIGAN. JAPANESE CAR DEALERS HAVE RESPONDED BY COMING DOWN FROM THE HIGH HORSES THEY RODE PREVIOUSLY WHEN BUYERS DID NOT ALWAYS HAVE THE CHOICE OF COLOR AND OPTIONS AND NEARLY ALWAYS HAD TO WAIT AT LEAST SIX WEEKS OR MORE FOR DELIVERY. THE PREMIUMS AND THE TAKE-IT-OR-LEAVE-IT ATTITUDE ARE GONE. THEY NOW ARE TAKING THE ''YOU CAN'T AFFORD TO PASS UP THIS DEAL, WE'RE SELLING EVERY CAR AT A LOSS AND MAKING IT UP IN VOLUME,'' APPROACH, AND STEALING THE CUT-RATE THUNDER THAT HAS PROPELLED SALES OF AMERICAN CARS FOR THE LAST TWO YEARS. ''THERE IS A LOT MORE CATERING,'' SAID BENJAMIN KAYE, GENERAL SALES MANAGER AT BOB BREST BUICK NISSAN IN LYNN. ''THE DEALERS ARE DEALING WITH CUSTOMERS MORE RESPECTFULLY.'' KAYE SAID STEPPED-UP ADVE

Article from:

The Boston Globe (Boston, MA)

Article date:

April 13, 1987

Author:

CopyrightCopyright 1987 The Boston Globe. Provided by ProQuest LLC. (Hide copyright information)