Japan’s non-tariff barriers: a problem or a myth?

When Ford decided the time was right to exit the Japanese market, the OEM did not go quietly. In a January 2016 statement, company spokesperson Neal McCarthy decried Japan as “the most closed, developed auto economy in the world, with all imported brands accounting for less than 6% of Japan’s annual new car market.”

Ford is not the only US OEM that has struggled to penetrate the mainstream market. GM, until recently the world’s third largest OEM, sold only 1,228 vehicles there in 2016, where for the most part it only sells Cadillac and upmarket Chevrolet models. The problem has never been tariffs; unlike the US, which charges 2.5% on imported passenger vehicles and an additional 25% on light trucks under the so-called chicken tax, Japan has zero tariffs on finished cars.