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SATURN PLANS TO OPEN DEALERSHIPS IN JAPAN.

Byline: Andrew Pollack The New York Times

The Saturn division of General Motors Corp. announced Monday that it had signed the first six dealers to begin selling its cars in Japan next spring.

``We've been quite frankly pleased with the response from potential retailers,'' Keith S. Wicks, general director of Saturn Japan, said Monday after appearing at a news conference with the dealers, who wore white V-neck Saturn sweaters.

Many analysts have been skeptical of Saturn's prospects in Japan because Japanese manufacturers are extremely strong in the country's small-car market. The recent rise of the dollar against the yen also could make it more difficult for Saturn, which has not yet announced prices for Japan, to be competitive.

It is also not clear whether Saturn's American policies of exclusive dealerships and no-haggle pricing, will take hold in Japan. Discounting by dealers is expected. And because real estate prices are extremely high, it could be difficult for Saturn to persuade dealers to devote outlets or showrooms exclusively to its three models - a sedan, a coupe and a station wagon.

But Saturn, which will put the steering wheel on the right side of the cars for the Japanese market, appears to have relatively modest goals here, especially since its factory in Spring Hill, Tenn., is already straining to fill orders in the United States. Saturn currently exports only to Canada and Taiwan.

By entering Japan with the Saturn, which was originally designed to compete with small Japanese cars, General Motors also appears to be trying to counter Japanese criticism that American car companies have not tried to compete in Japan with models suited for the market. A trade agreement signed by the United States and Japan last year was intended to help open the way for more Japanese dealers to carry American cars.

Saturn Japan plans to sell mainly in the heavily populated Tokyo-Osaka corridor. It expects the six dealers to open at least 10 Saturn outlets. The company plans to sign other dealers and have a total of 20 outlets by the end of 1997. Officials said that they expect Saturn dealers to sell 400 to 500 cars a year, compared with about 300 to 350 for a typical Toyota Corolla dealer.

The six dealers include Yanase & Co., the huge imported car dealer chain that has been GM's main distributor in Japan for most of this century. There is one Nissan dealer, one Honda and one Daihatsu dealer.

Others seem less conventional. One company, Hanaten, is a used-car dealer in the Osaka area that sees its Saturn franchise as its entry into the new-car market. ``I heard it's very successful in the United States,'' Hiroshi Yamamoto, the director, said when asked why he thought the Saturn would succeed in Japan. He plans to build showrooms exclusively for Saturn on the sites of three of his 57 used-car lots.

Another dealer is JR East, which runs what used to be the national railroad in the Tokyo area. JR began selling cars about five years ago and now has two outlets selling Volvos.

GM has had disappointing sales this year of its Chevrolet Cavalier, which was retrofitted for Japan and is being sold by Toyota. Sales in the first few months are well below the level needed to reach the goal of 20,000 units a year.

Wicks said that although he still expected the Cavalier to succeed eventually in Japan, the experience ``shows that even though you start out with a very vast and wide and strong dealer network, it's not a guarantee of success.''
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Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Date:Jul 9, 1996
Words:593
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