REVscene Automotive Forum - Why Korean car manufactures struggle horribly in Japan?

It is all about customer perception.. Older Japanese still think Koreans are backwater.

Remember younger Japanese don't drive as often.

Timpo you might want to brush up on your geo-politics.

case in point:

http://www.nytimes.com/2013/08/12/bu...gewanted=print
August 11, 2013
Korean Companies Struggle to Gain Traction in Japan
By ERIC PFANNER

TOKYO — Brandishing a new Sony Xperia as she left a mobile phone shop in a trendy part of Tokyo, Nisako Hanawa, a 17-year-old student, explained that she had chosen that brand “because of its cool design and its good reputation.”

Asked about another leading smartphone maker, Samsung Electronics of South Korea, she and a friend exchanged quizzical looks. “Samsung?” Miss Hanawa asked. “I haven’t heard of it.”

Samsung Electronics may be the largest consumer electronics company in the world, selling one out of every three smartphones and one in five televisions. LG, the other giant electronics maker in Korea, has a significant share of TV and washing machine markets in Europe and the United States. But here in trend-obsessed Japan, consumers have not caught on that elsewhere in the world some Korean products are knocking Japanese rivals off the shelves.

Many Japanese explain away the absence of Korean brands by claiming the quality is inferior. “South Korean products are still affected by a ‘cheap and nasty’ image, which remains prevalent among Japanese above a certain age,” wrote Hidehiko Mukoyama, an economist at the Japan Research Institute, in a research paper about Japan-South Korea trade relations.

The evidence says otherwise. Korean-made TVs, phones, washers and cars rate higher than many Japanese brands in independent tests by Consumer Reports, CNet and others. LG TVs have been getting favorable reviews in Japan. A local magazine, HiVi, recently rated a 32-inch, high-definition, 3-D-capable LG set-top ahead of televisions in its category from Mitsubishi and Sharp.

The unfamiliarity is not because tariffs make Korean products costlier. Japan eliminated the import duty on many Korean electronics products, including TVs and smartphones.

But this last holdout is finally being cracked open. In 2008, LG stopped selling its televisions in Japan, but it reintroduced them two years later. Now many of the biggest electronics retailers in Japan, including the No. 1 player, Yamada Denki, and the second-biggest chain, Biccamera, sell LG TVs.

At a suburban Tokyo branch of Nojima, a major Japanese retail chain, LG televisions are displayed prominently alongside sets from domestic brands like Sony, Sharp, Panasonic and Toshiba.

Kohei Tomizawa, a sales clerk, said LG TVs were selling briskly, though not as well as those from Sony. LG sets “tend to be more popular with younger people, and younger people don’t buy as many televisions as older customers, who tend to prefer well-known Japanese brands, like Sony,” Mr. Tomizawa said.

The quality myth may be less believable to a younger generation of consumers. With South Korean food and television shows popular in Japan, LG has latched on to the popularity of K-pop music across Asia and beyond. It has run ads for its smartphones in Japan that feature Kara, a Korean group that is popular in Japan.

“I think things have improved compared to the old days, thanks to the influence of Korean popular culture,” said Byoung-Uk Lee, assistant director of the Korea Trade-Investment Promotion Agency in Japan.

LG said it sold about $675 million worth of TVs, smartphones, washing machines, vacuum cleaners and other goods in Japan last year, up about 45 percent from 2010.

Samsung also pulled out of Japan in 2007, after failing to make much of a dent here. (The biggest Korean carmaker, Hyundai Motor, also beat a retreat from Japan shortly thereafter.)

But Samsung has come back for a second shot in Japan, starting with its smartphones. NTT Docomo, the largest mobile phone carrier in Japan, has turned to Samsung to try to fend off rising competition from two rival network operators, SoftBank and KDDI.

Those two companies have been poaching customers from Docomo, which does not offer the popular iPhone. “Docomo needs Samsung, and that is giving it an opening,” said Michito Kimura, an analyst at IDC, a research firm.

Starting in May, Docomo plastered Japanese cities with advertising posters featuring the flagship Samsung Galaxy S4 smartphone alongside a Sony Xperia A. The campaign, for what Docomo bills as its “summer collection,” is the first time that any Japanese carrier has given such prominence to a Samsung phone.

So far, the results of Docomo’s embrace of Samsung have been mixed. Analysts say Samsung smartphones have been a tougher sell in Japan than in other countries where consumers are familiar with the brand through the televisions and other goods.

Docomo said that under its summer promotion, it had sold 400,000 Galaxy S4 phones through mid-July, but that was less than half the total of Sony Xperia A handsets.

Apple dominates the Japanese smartphone business, holding a 40 percent market share in the first quarter, according to IDC. Sharp, with 15 percent, and Sony, with 13 percent, follow. Samsung has not cracked the top five vendor ranks.

Japanese and Korean news media have reported that Samsung is considering re-entering the Japanese television market. Samsung declined to comment.

To succeed in Japan, Samsung will have a lot of work to do changing a mind-set. But some analysts, like Sea-Jin Chang, the author of “Sony vs. Samsung: The Inside Story of the Electronics Giants’ Battle for Global Supremacy,” are convinced that South Korean companies have a brighter future in Japan.

“Japanese customers favor domestic producers,” said Mr. Chang, executive director of the Center for Governance, Institutions and Organization at National University of Singapore. “No Korean or Western firms were good enough for them, except Apple. But you will find more Korean firms accepted in the Japanese mainstream in the future.”

Joshua Hunt contributed reporting.