Eiji Iwakuni, who on April 1 became the new president of Ford Motor Co. (Japan) Ltd., knows the carmaker did not hire him for his English-speaking ability.
Iwakuni says he is not fluent in English but did not feel much culture shock in coming to the American company. “I am not going to try hard to improve my English. My role is to improve this company’s business performance — its sales, profitability and presence in Japan,” said Iwakuni, 56, a 30-year veteran at Honda Motor Co. before his move to Ford.
“I have a feeling that I can produce a bigger impact than the one I made at Honda,” he said in a recent interview with The Japan Times.
Iwakuni held major positions in Honda’s sales planning department and dealer training center, and in 1993 was appointed president of Honda Clio Saitama, Honda’s second-largest domestic dealer.
His last posts were as head of the large project section and leader of the distribution reform project at Honda’s Tokyo headquarters. His strategy at Honda ranged from giving speeches to some 1,000 dealers at a time to visiting dealers individually to encourage them to win over customers. Honda’s sales subsequently improved.
Honda is now doing well in managing its dealers, Iwakuni said, noting that part of the reason is that, like him, many Honda employees are regularly sent to dealers to learn about their sales activities.
Ford also has potential, he said, adding that “It just needs to bring out its energy in one direction.” He said he is determined to apply what he learned at Honda to improve Ford’s sales.
Iwakuni admitted Ford is currently far from being successful in Japan. He noted that Ford products do not address Japanese consumer tastes, and that its dealer activities must reach the average performance levels of other Japanese dealers.
Ford’s sales in Japan steadily increased from 2,959 units, or a 1.5 percent share, in 1991 to 21,011 units, or a 5.34 percent share, in 1996. However, its sales dropped to 13,983 units in 1997, down 33.5 percent from the previous year, and its share fell to 4.1 percent.
While an average salesperson at a Japanese dealer sells 40 to 45 units a year, the figure is only 20 to 25 autos for the Ford counterpart in Japan, Iwakuni said. He urged dealers to have a sense of urgency in selling their cars, even if the products are not popular, and to put more emphasis on after-sales services. Revenues from those services can cover around 60 percent of management costs, he said.
Through these services, dealers can also establish a long-term relationship with their customers, he said. “If they feel such urgency and responsibility (from dealers), they can at least reach the average level of other Japanese dealers,” he said.
With its lackluster sales, Ford will have to push back its original target date for achieving annual sales of 100,000 units to 2000, he said. Ford has to sell at least 90,000 units a year — its break even point — to maintain its 300 sales outlets in Japan, he said.
Iwakuni also pointed out that the demands of Japanese customers are very different from other countries, and Ford must study the so-called Japan specs peculiar to the market here. For instance, Japanese customers expect cars that are priced over 2.5 million yen to have a navigation system and a trunk big enough for holding and providing easy access to golf equipment.
Ford also needs to move quickly, he said, describing the U.S. auto company as a huge battle ship that takes a long time to change course compared with Honda, which is like a patrol boat that can turn swiftly.
“Honda President (Nobuhiko) Kawamoto told me that he manages the company in a three-year span, and said to me, ‘Since Ford takes at least eight years to incarnate things, whatever you are trying to achieve will be only realized at Ford after your retirement.’ But such a management cycle must be changed at Ford,” he said.
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