The Chevrolet Volt went on display in Japan last Wednesday at the annual Spring Congress of the Japan Society of Automotive Engineers in Yokohama.

During the three-day event, it was expected to be seen by as many as 70,000 visitors in the world’s third-largest auto market.

Included in this conspicuous showcasing were visitors from Japanese industry, media, academia and government.

Here is a technological innovation being shown in the country that prides itself on being technological innovators for the world.

The Volt’s coming to Japan is “a great opportunity for General Motors to highlight our advanced technology leadership in front of the tech-savvy community in Japan,” said GM of Japan managing director Sumito Ishii. “It will also contribute to awareness of the Chevrolet brand in one of the world's largest vehicle markets.”

General Motors’ press release is otherwise exceptionally short, implying the company has little to say on the topic other than to document that it happened, and it will "contribute to awareness."

We have not seen any announcements that the Volt will actually launch in Japan, but as long ago as March 2010, Automotive News reported GM did say it was discussing the possibility.

That same article noted GM sold a mere 2,686 units in Japan for 2009, which represented a 14 percent decline from the year prior.

What could GM gain from selling the Volt in Japan? Potentially a reversal of stigma as to what Detroit can produce. Potentially more, if Japan were to be opened to fair trade.

According to a paper published last year by the American Automotive Policy Council (AAPC) – a research and advocacy collaboration between Chrysler, Ford, and GM – Japan was ranked 30 out of 30 as the most closed market among the Organization for Economic Co-operation and Development (OECD) countries, and imported only 3.9 percent of its vehicles.

In contrast, Japan has consistently exported 40 percent or more of its car and truck production. In 2008, it exported 60 percent, most of which went to the U.S. and Europe.

Between 2000 and a little before the paper was written, the U.S. had exported 183,000 vehicles to Japan versus 16.3 million vehicles exported from Japan to the United States.

These sales plus automotive parts exported from Japan represented over 70 percent ($52.1 billion of the total ($72.7 billion) U.S.-Japan automotive trade deficit in 2008, the AAPC said.

“By anyone’s common sense standard – whether an economist, policymaker, marketing specialist, consumer or layman, this is not evidence of an open market, but a rigged market,” the AAPC said.

Could the Volt successfully compete in the tight Japanese auto market?

It goes on to say Japan’s closed market was intentionally created by post-World War II policy.

The paper summarizes decades of Japanese efforts to keep all foreigners from entering and competing on even footing with Japanese automakers.

After WWII, Japan “designated the creation of a major world class automotive industry its number one National Industrial Policy strategy,” the AAPC said, and it “provided every benefit, incentive and protection from competition that it could.”

In the 1970s, having secured a strong domestic auto industry, Japan set on a course of exporting to capitalize in other markets, while keeping barriers to entry in its own quite high.

It did reduce import barriers slightly in the '70s, but the AAPC said it “perfected the art” of creating “non-tariff barriers” to keep foreign competition at a disadvantage. These include a variety of regulatory, legal and taxation hoops for would-be foreign automakers to jump through, if they could at all.

This was not just a bias against perceived inferior U.S. products, but against every automaker in the world, meaning the Europeans had just as hard a time creating significant market share.

Efforts to transcend these barriers were the subject of negotiation and friction through the years.

In 1995 the situation between Japan and the U.S. climaxed when President Clinton threatened to impose 100-percent tariffs on Japan’s luxury cars if its government did not agree to open its market fully. This seemed to work, and a 1995 Memorandum of Understanding agreement was settled. At the time, U.S. vehicle imports were 5 percent. They are around 4 percent now.

The AAPC minces no words in laying out a case for how Japan deliberately stacked the deck.

No doubt allegations of not playing fair have been leveled at the U.S. in other situations.

An electric plug in a car is not a new site, as Japan is busy making its own plug-in battery electric vehicles. However, the American-made extended range electric vehicle was unique in its own way, and on display for all to see.

This not withstanding, for half a century Japan has had policies that greatly favor its auto industry, the AAPC said, but it advocated not giving up efforts to crack the market:

“The fact that the efforts of U.S. auto and auto parts suppliers over decades, and successive Congress and Administrations have failed to succeed in making Japan a genuinely free and open auto market, that does not mean we should simply give up,” the AAPC said last year, “Japan’s dominance of its home market gives it vast unfair advantages in the U.S. and other markets where we compete. Leaving this situation unchallenged affects our own manufacturing competitiveness here in the US. more strongly than securing additional exports to Japan.”

As for the Chevrolet Volt, we would surmise this is a probing time for GM’s decision makers.

Could its technology actually create enough interest to spur GM to send the production Volt to Japan and try to start selling it and subsequent Voltec products?

We shall see.

Source: GM , AAPC