TOKYO, Japan—The last time Shujiro Urata wanted to buy a new car in Japan, his phone happened to ring. It was the local Toyota dealer on the phone, asking him if he was thinking about buying a new car. When he replied in the affirmative, the dealer and a coworker showed up at Urata’s doorstep an hour later with two demo cars, which Urata and his wife test-drove around the neighborhood. The Uratas decided to buy a car from the dealer. The dealer also handles their car insurance, coming to their home whenever the insurance contract needed to be renewed. The Uratas bring in their car to the dealer every few weeks for a free car wash, where they hang out and talk to the employees, who have become their friends, about dog breeds and family birthdays.
The rapport may sound unusual to Americans, who are about as happy to voluntarily go to a car dealer as they are to get teeth pulled, but the relationship between customer and car dealer is a common one in Japan. “It may sound like a lot, but Japanese customers are used to this kind of service,” Urata, who is also an economics professor at Waseda University in Tokyo, told me. “It is a kind of custom that American dealers aren’t used to.”
This hospitality has helped Japanese automakers stay dominant in the Japanese market. Japanese brands account for about 90 percent of the domestic auto market in Japan, according to the Japanese Automobile Dealers Association. In the United States, by contrast, domestic brands have a much smaller share of the market. The Big Three—General Motors, Ford, and Fiat Chrysler—make up 45 percent of the market, while Japanese brands make up 39 percent, according to auto-sales data from The Wall Street Journal. The dynamic contributes in part to the trade imbalance between the United States and Japan. The U.S. trade deficit with Japan last year was $68.9 billion, and a large share of that surplus—$52.6 billion—came from vehicles and from automotive parts, according to the Department of Commerce.