I thought they provided real world numbers based on their targeted digital ads. Wasn’t it something like 10m views resulting in 500,000 additional inquiries about Tesla from non-Tesla owners. So new people to the brand. Didn’t they also say they would continue to do very specific targeting, collect the resulting data, etc., etc.,?
Yes, yes, yes!! The primary issue is using a generic word 'advertising' to describe highly targeted promotional and information devices, each of which is designed to reach the actual potential buyers with the information and/or inducements to buy TSLA products. That Elon specifically mentioned Japan is clearly not a spontaneous outburst.
Here are the summary data (source: statista, aggregated from JADA)
The best selling imported brands in 2022 were, in order Mercedes Benz, BMW, Audi, and Volvo which sold 119,966 vehicles in Japan that year. The total of all imported cars then was 278,000. That was with a total market of 4,201, 321. That 119,966 cars were sold mostly in the Tokyo metropolitan area plus handful of other large cities.
Japanese homologation rules and urban parking issues generally make the huge foreign cars unsuited to most of Japan. Despite that the Toyota Land Cruiser does sell well there, as do Lexus, although almost entirely the smaller, narrower models.
So what was Elon's reasoning? I speculate that it was thinking about the >300,000 market for major large foreign vehicles plus the market for large Japanese ones. Then he must be thinking of narrower (smaller, yes, but primarily narrower) upcoming Tesla models plus the market that actually chooses giant imports. As it stands Toyota is largely ignoring BEVs, Nissan is stagnating, Honda not too attractive as a prestige purchase, so...whay not resuscitate the prestige, cachet and practicality of Tesla?
if that is the logic, they need better models, soon coming, but above all they need to find the prospects for the present lineup. Would Land Cruiser types buy Cybertruck? Nobody really knows. What is known is that only 1.4% of Japanese households have annual income above ~US$130,000 . we also know that conspicuous consumption is often considered gauche, so the marketing process fo luxury goods, such as imported cars, is a delicate topic.
That really means Tesla needs to find a very refined and well-reasoned approach to have real success in Japan. Mercedes-Benz found that with >52 thousand sold in 2022. Others have failed almost every time they've tried.
1. Describe all the Tesla benefits in tech-speak, do NOT make those translations. They need to be very carefully evaluated to avoid problems within the three Japanese writing systems. Precise, elegant and correct communication is essential. Translations are almost certain to be suboptimal.
2. Do careful research into purchase and use patterns for those ~120,000 foreign car purchaser per annum. Then 3. with that data decide what media should be used to communicate and how.
Although I am no expert on Japan I did work there three times, including one for a major Japanese OEM seeking better results and another for partial acquisition of a major Japanese consumer finance company. So, since the late 1960's I have been very much aware of the unique character of the Japanese consumer behavior. That includes specifically the retail sales and delivery process for vehicles.
Anything even approchng detail about all this would stray far off-topic. Still, Elon's comment yesterday was NOT a throwaway. Bluntly, as I'm sure he knows Japan auto sales is not an advertising issue although it is in part an awareness issue. Fundamentally it is about positioning. The most conspicuous examples of foreign company success are P&G and Zara:
Discover 3 case studies of successful foreign companies in Japan and the touted reasons for their success. Learn about business strategy for Japan.
mailmate.jp
A much earlier example was VISA but that really worked though a licensing model and did so in 1973, rather a long time ago. (I was peripherally involved in that one).
If my suspicion is correct Tesla is devoting serious effort on this one. The value of success would be far greater than just sales in Japan. It would be the adaptation of the Japanese auto distribution system to a technological age. That would be very, very valuable.
Finally, there are ~new car auctions in Japan, that bypass the dealer systems. However almost all new cars are sold by dealers in a process that includes negotiation, over tea, that is an accepted part of the process. That sounds on the surface like dealers everywhere else but it does differ largely in the social interaction.
This topic may be a little reminiscent of the pain in launching Model 3. In the end it might well be worth it.
The two foreign auto executives who were successful in adapting to these systems were Carlos Ghosn with Nissan and Mark Fields with Mazda. They were hugely different but both were successful in large part because of desperation within their Japanese companies.
Fields could be very useful to Tesla, although the Hertz-Tesla history might have some stress in such a collaboration. Fields was the Hertz CEO who bought the Tesla fleet.
