Tyler Brûlé: Japan carmakers need to bet more on luxury
By Tyler Brûlé
Friday, October 19, 2007

By the time you read this, Tokyo will be crawling with a curious mix of never-before-seen vehicles and the journalists that cover them. In sprawling trade halls, marketing directors from Nissan, Toyota and Subaru and others will be putting the finishing touches to their stands at the Tokyo Motor Show - applying extra lubricant to the turntables that will spin over-buffed cars and making sure that hostess's dresses are hemmed so they hang just so - not too much leg but just enough to attract car correspondents from Germany's powerful trade titles.

I managed to escape just before the motoring press (as the British like to call them) descended on my hotel. As I said farewell to the hotel manager, he was bracing himself for what counts for one of the most important weeks for Japan's convention business.

As I sped to the airport, I watched flatbed trucks laden with cute little cars roll toward the city under special escort. While Japan Inc., and Toyota, in particular, will be pushing their hybrid and various ecologically friendly messages to the world's media, there are many other things they might want to boast about - cute and perfectly formed is one of them.

A day spent in any Japanese city will reveal myriad models of bulbous runabouts, boxy vans, slimmed-down people carriers and assorted retro models that all look like Japanese cousins to Fiat's Cinquecento or the new BMW mini.

The mix of micro and pint-sized vehicles is so bewildering that you have to wonder why Japan's major brands don't do more with these models overseas - particularly when many urban consumers are looking for smaller cars for scooting around town and BMW and Fiat have attracted so much attention with their re-released classics.

At the other end of the market, Japan might also want to start being a bit more aggressive with its made in Japan message and confidently stating that it is every bit as good, if not better, than made in Germany these days.

Glance in the rearview mirror and it's amazing what a difference two decades makes. If you had asked a consumer anywhere in the world 20 years ago if Japan could rightfully enter the luxury car market, the answer would have been a firm no. Today things look decidedly different. The Japanese have all the right ingredients to become serious challengers in the luxury arena even though the Germans dominate all things four-wheeled and high-end - the interesting British brands are German-owned and the Italians are doing their best to stay in the premium arena.

Being the world's biggest market for luxury goods helps. Japan adores its well-cut suits from Verona, handbags from Florence, obscure beauty brands from France, quirky shoes from Austrian cobblers and woven tablecloths from Finland. A national obsession with details mixed with a culture that constantly seeks to improve both its services and its products has created a hothouse to launch premium luxury brands.

In fashion, Made in Japan has arguably become the ultimate mark of quality. The same can also be said for ceramics, furniture and precision electronics. A Savile Row tailor recently told me that he would rather buy an off-the-peg suit made in Japan than a hand-sewn suit made in Britain. Two weeks from now that design message will be underlined when thousands of designers, buyers and journalists arrive in Tokyo for the city's design week.

When Toyota launched its Lexus brand in the mid-'80s and said it was aiming at the top end of the market, drivers of Mercedes, analysts who watched the sector and even Japanese nationalists were a little more than skeptical. When senior executives announced that the whole venture would be run out of California, it seemed even more farfetched.

Two decades later, Lexus has become the leading brand in the luxury sector in the United States and has set its sights on doing the same around the world. Executives at Germany's top brands might have once sniffed that Lexus didn't represent luxury, but such off-color comments have long since passed. That Lexus's papa Toyota has become the world's No. 1 car company, in part because of its widely admired management style, is starting to cause concern in the German corners of Ingolstadt and Stuttgart. At Frankfurt auto show this year, Lexus was making it clear that it has the line-up of vehicles, backed by its hybrid message, to repeat its success in America.

The only thing that Lexus is failing to deliver on is perhaps its most important weapon for winning over skeptics - its Japanese-ness. Where German brands are happy to celebrate their roots, Lexus has been reluctant to push its Nagoya heritage. There is some talk of the J-factor around the brand, but it could be a bit louder. When Tokyo design kicks in, buyers and journalists will be drawn by the country's respect for craftsmanship in everything from wood, to glass, to copper.

Lexus might argue that the brand was born in California, but to a more design-minded global audience that appreciates retailers like United Arrows, the fashion brand Comme des Garçons and a design company like Graf, the town of Torrance, California, doesn't exactly say luxury or design. Pushing the craft message and adding more premium products to its line-up, like the lovely, old-school Toyota Century, would not only deliver a different message from the Germans but would also spark further innovation from home-grown competitors Nissan, Honda and Mitsubishi.