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Japanese move to counter shifts in key US market

Industry sales figures have shown that truck and utility vehicles account for more than half, 54 per cent in January alone, of all vehicles sold in the US.

[CHICAGO] With car sale booming and the spring sales season about to get underway, Japanese and Korean carmakers are feeling the pressure from their resurgent American competitors.

But the Japanese carmakers, counting on the American market for profits, insist they welcome the competition and that opportunities abound.

But the Americans are also benefiting from the recalls and quality problems of Japanese manufacturers, which are confronting the relatively weak lineup of trucks and sport utility vehicles.

Industry sales figures have shown that truck and utility vehicles account for more than half, 54 per cent in January alone, of all vehicles sold in the US.

Toyota is replacing its new mid-sized truck for the first time in 10 years.

"It's a new truck and it's a much better truck," said Jack Hollis, Toyota Motor Sales group vice-president for marketing.

But that hasn't stopped Japanese carmakers from changing their tactics to counter the challenge from American brands such as Ford, Chevrolet and Jeep.

Toyota, which has long depended on sales of its popular Camry and Corolla models, which are often described as plain appliance cars, also showed off limited special editions that it hopes will spark renewed interest in the vehicles, which are sales leaders in the respective segments.


"We want to offer something extra. Vanilla is still the most popular flavor in the world but it doesn't hurt to sprinkle in some chocolate chips or cookie dough," Mr Hollis told AFP during the previews of the Chicago Auto Show, which opened Saturday and runs through February 22.

"I like all the competition (from the Americans) because it brings out the best in everybody." A new Toyota Prius is in the works but low fuel prices have undercut demand for hybrid vehicle.

Honda, which is facing its own quality issues after recalling thousands of vehicles with faulty airbags made by key supplier Takata, also used its press conference in Chicago to outline a strategy that will depend more heavily on trucks and utility vehicles.

Over the next year, Honda will introduce a brand new version of the Pilot, one of its most popular utility vehicles, as well as a new small utility vehicle, dubbed the HR-V, and a new version of the Ridgeline.

Honda senior vice president Jeff Conrad said the company was pressing ahead with an overhaul of its product line that included a greater focus on utility vehicles and truck to satisfy the demands of its American customers.

"Our vehicles are also going to have Honda's traditional quality and reliability," which has been critical to Honda's success in the US over the years, Conrad said.

"They'll also have the latest (electronic) technology." The emphasis on trucks and utility vehicles by Honda, which has anchored its position in the US market with its successful sales of passenger cars such as the Accord and Civic, wasn't exactly an accident.

Sales of utility vehicles and trucks in the US have steadily grown over the past three years and sales of compact and mid-sized utility vehicles now run neck and neck with those of mid-sized passenger cars, traditionally the largest segment in the US market, according to IHS Automotive.

In addition, pick-up trucks now fetch more than US$45,000, prices once commanded only by luxury sedans.

Sales of the original Ridgeline, which came highly touted from Honda, were disappointing.

But the new version will be more like a traditional pickup, Conrad noted.

The new vehicles will be loaded with the latest technology and built with an eye toward maintaining Honda's reputation for quality, reliability and efficiency.

Jose Munoz, chairman of Nissan North America, said that after double-digit sales increase last year, the Japanese automaker is still planning to increase its US market share.

"I'm very confident we're going to have steady growth in the years to come," Munoz told the Economic Club of Chicago, noting the company was namely focusing on improving its dealerships.

Nissan introduced a new utility vehicle last fall, the Murano, and will launch two new pickup trucks in the next 12 months, beginning with the Titan XD, later this year.

"We plan to maximise the quality of the service we provide our customers through our dealers. I worry about every single one. We also see it as a huge opportunity," said Munoz.

"The domestics are super strong. Everyone is the enemy... But you want the industry to be healthy."