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Japan focus on eastern Europe

Japanese carmakers have achieved record penetration in western Europe – and are set to use the success as a springboard for building sales in the emerging eastern European markets. The development of diesel engines and styling improvements are key to that success, says a report in today's Japan Times.

##jazz--right--Honda Jazz ##

In 2002, Japanese automakers' combined share of the European market is likely to surpass the 10.4 per cent slice they held in 2001. At the same time, the automotive market in Western Europe is expected to shrink due to the sluggish world economy.

The sales volume of Japanese cars in the January-November period of 2002 came to 1.54 million units, or 11.5 per cent of the market, according to the European Automobile Manufactures Association.

Toyota has set its 2005 annual sales goal in Europe at 800,000 vehicles, or a 5 per cent market share. But Japan's largest carmaker is confident it can achieve this target earlier.

Honda expects sales of 194,000 units in 2002, up 14 from the previous year. Mazda has forecast sales of 171,000 units in 2002, up 4 per cent from the previous year, rising to 182,000 units in 2003.

Taking advantage of its accumulated operational assets in Asia, Honda plans to export cars made in China to Europe in 2004. Next year, it will begin by exporting to Europe auto parts produced in Thailand and the Philippines.

And Nissan and Mitsubishi Motors Corp. are utilizing the operations of their capital partners in Europe. Nissan entered into an alliance with French auto giant Renault SA in 1999, while MMC tied up with German-American auto titan DaimlerChrysler AG in 2000.

MMC will begin producing at its Netherlands plant in 2004 a new compact car that uses a platform jointly developed with DaimlerChrysler.

But despite all their efforts, Japanese carmakers still have a relatively small share of the European market when compared with the combined share of 33.5 per cent enjoyed in the U.S. market in 2001, in spite of success in courting western buyers with innovative design – such as Honda's spacious small car the Jazz.

Analysts believe that failure to promptly respond to the popularity of diesel engine models in Europe is one of the reasons Japanese carmakers are well behind their competitors in the region.

Now Japanese manufacturers are producing the types of diesel engines in demand in Western Europe, they are confident of substantial growth in sales: they recognise that their vehicles need western European recognition before they can hope to win business in eastern Europe.

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