Introduction

Does the United States have its unique national conditions...?

Responsible Editor | Li Sijia

Editor | He Zengrong

"Can you analyze in detail the profound reasons behind the stark contrast between Toyota's performance in domestic and international markets? For instance, when I visited the US in May this year, I noticed Japanese cars, especially Toyotas, everywhere, and they were highly recognized by local car owners. I had a similar feeling when traveling in Thailand before the pandemic."

On the evening of the push notification for the article "My Dad Bought Me a Toyota, and the Story Has a Twist," a friend sent me a private message expressing their thoughts on the matter.

Image | "Where there's a will, there's a way, and where there's a way, there's a Toyota" – This brand left a profound impression on some generations of Chinese people, but in recent years, it has barely made a notable impact in the fields of new energy and automotive intelligence.

This is both a reflection triggered by the article and a question. Regarding the topic of why Japanese brands and Toyota are popular in the US, I briefly touched upon it at the end of the previous article. However, considering the length of the article and the resulting reading experience, I did not delve into this issue at the time.

But if we were to delve deeply into my friend's question, it would be incredibly vast. It encompasses not only the various historical issues accumulated by the automotive industry over nearly half a century of globalization but also the combined factors of different economies and user habits across countries and regions. Behind this lies deep political and economic games between nations.

A detailed analysis of these contents could fill a monumental work, which is obviously unnecessary for a WeChat public account push and not something I could complete and elaborate on in a short period.

Image | A Toyota Prius taxi on the streets of New York

Regarding the automotive market in Thailand and Southeast Asia as a whole, our community recently sent personnel to Thailand for a week-long inspection focusing on the topic of Chinese automobiles going abroad. Relevant content will be detailed in subsequent articles. Here, I will use limited space to provide a personal perspective on why Japanese brands, especially Toyota, have maintained a strong presence in the US market for a long time, for your reference.

The "Car Life" of an American Resident

Many Chinese people who have traveled to the US often share similar experiences related to cars after arriving:

After settling in and stabilizing for a short period, they try to obtain a US driver's license and then buy a second-hand car that suffices for their needs. There is a high probability that this will be a Japanese car, with Toyota Corolla being the most common choice.

Image | In the US, it's common to buy a Corolla for an adult child to drive first. However, the proportion of second-hand cars is much higher than in China.

This will then be their ride for several years of student life. During this time, the Corolla will provide a much wider range of activities compared to those who do not own a car and significantly reduce the risks they may encounter during daily commutes.

After graduation and finding a stable job, they usually choose to sell the second-hand car they've been driving for years. If they initially chose a Japanese car or even a Corolla, they will most likely upgrade to a new Camry or Avalon.

Further down the line, if they do not choose to return to China but apply for permanent residence or citizenship and continue to progress in their careers and lives, they may opt for a Highlander when they reach their mid-30s – if they can continue to accept Toyota cars.

I have a personal example of this. About 15 years ago, my cousin went to the University of Minnesota Twin Cities for further studies, starting with a "Corolla opening."

At that time, the 2003 model Corolla he described as "in good condition" cost him $5,000, whether it was second-hand or third-hand. His reason for buying the car was the same as that of many Chinese students studying in the US and even local young Americans. Because in the US, a car is not an "addition" to one's quality of life but an essential tool, a true extension of one's legs.

Due to the unique city-community structure in the US, residents are highly dispersed across hundreds of thousands of communities nationwide. To access any services, they need to travel at least a few kilometers to different living service facilities or commercial centers.

US real estate, of course, follows the universal rule that rent and property prices are positively correlated with location and school districts. Communities with dense living facilities, adjacent to CBDs, or those with excellent security and good school resources have high property and rental prices. Popular universities with a high concentration of international students also fall into this category. Therefore, to obtain relatively affordable or economically feasible residences, students and even most American citizens often choose more remote communities.

But this poses a serious commuting problem.

Image | Since the beginning of this century, street safety and overall social security in the US have been deteriorating. At this stage, driving is the best mode of transportation to avoid direct contact with such groups.

Even if nearby living facilities are just a few kilometers away, which might seem like a short drive, walking to them every time would be quite a workout. Taxis or ride-hailing services are relatively expensive. Moreover, the US public transportation system cannot compare with China in terms of density and efficiency, and its safety has been declining since the beginning of this century.

Especially after the 2008 subprime mortgage crisis, the gradual decline in social morality and increasing security issues in the US have made self-driving the safest mode of personal transportation.

Against this backdrop, Toyota's ease of driving and excellent reliability are its core values in the US market. Furthermore, it has a fuel economy advantage over American muscle cars. More importantly, since entering the US market in the 1980s, Toyota has built a highly sophisticated maintenance and service system nationwide over four decades. Therefore, convenient maintenance and easy access to spare parts have become additional pluses.

Precisely because of the above reasons, Toyota and Lexus are generally considered to have more stable quality than other brands in the US used car market, which is equally important as the new car market. Used car dealers tend to give these two brands a higher evaluation when acquiring them.

However, for Japanese companies, gaining universal recognition of their brand value in a particular market also means they can sell at better prices.

Image | The used car market in the US is much larger than in China. Of course, in terms of scale alone, there are just as many unscrupulous merchants and pitfalls.

Toyota cars in the US generally sell for much higher prices than local brands like Ford and General Motors. Various sedans and SUVs of similar sizes are typically 3000~5000 USD more expensive. As for Lexus, a luxury brand, it goes without saying. Similarly, Toyota brand cars in the used car market are also significantly more expensive than other brands.

Familiar Recipe, Familiar Taste

Here, I suddenly realize the need to clarify to avoid being criticized. So let me emphasize that what I mentioned above is just the most familiar case around me – the experience of an ordinary Chinese student who went to study in the US shortly after the Beijing Olympics, using the savings of his elders, as well as a relocation compensation, to fund his studies. This is the optimal solution for a specific group but does not represent everyone.

Among American residents, those above the average middle-class line often choose to start with a new car or even skip A-class sedans and go straight for an RAV4 or CR-V. As for rednecks in agricultural states, driving their dad's old GMC Sierra, Ram 1500, Silverado 1500, or "Raptor" is a given.

Image | While there are many young American electric car owners, buying a car without a stable income essentially means relying on one's parents.

Regarding Tesla's rise in the US in recent years, taking advantage of the "Inflation Reduction Act" to give their sons and daughters a Model 3 or Model Y is also a fashionable choice.

In short, none of these have absolute answers, but one thing is certain: a car is the basic threshold for a normal life for anyone living in the US. The reason why Japanese brands, represented by Toyota, have been selling well in the US market and have even offset some of their losses from the Chinese market in recent years boils down to two fundamental reasons.

First, it aligns with US national interests. As the primary goal of the US political and business groups today is to block China at all costs, Chinese automobiles naturally need to be tightly guarded against. Japan, as a political vassal of the US, has given its automakers unprecedented freedom in the US market.

Second, Japanese automakers have thoroughly understood American driving habits and environments. It's well-known how capital, having fully grasped market rules, can act recklessly.

Image | Toyota's flagship plant in Kentucky, which is currently receiving additional investments to produce electric vehicles.

Not long ago, amid fierce partisan disputes, the US Congress passed a resolution to raise tariffs on Chinese electric vehicle imports in an unusual show of cooperation. However, this seemingly continuation of Trump's trade war with China is purely a political declaration aimed at boosting Biden's support rate in the upcoming elections.

It's essential to note that this has no practical impact on Chinese automakers – because US companies have long used various political and business channels to mobilize all means to basically prevent Chinese-made cars, including joint venture models of the same brand, from entering the US market through market channels.

The reason for this is that if Chinese-made cars were allowed to enter the US market, they would inevitably sweep the entire market in a very short time. Since around 2010, when domestic enterprises completely solved vehicle manufacturing technology issues, cars produced in China, whether independent or joint venture brands, have seen their configurations soar, and in the past two years, they have embarked on an almost desperate industry price war.

Image | Configurations and prices of some Avalon models sold in the US

Last year, the new Avalon encountered a marketing mishap when its promotional copy for "five killer features" was ridiculed by internet users in China. People couldn't understand why, in 2023, features like leather steering wheel, leather seats, leather gearshift knob, power-adjustable front seats, and 60/40 split-folding rear seats were still being touted as car owner benefits.

But is this really something to laugh at?

In my opinion, it's less of a marketing mishap and more of a case of the wrong script being used. Because across the ocean, if the new Avalon really came with these five configurations, it could indeed be boasted about as "conscientious." After all, the degree of low-end configurations for models sold in the US, whether Japanese or domestic, exceeds the imagination of domestic car owners.

Imagine, which model currently on sale in the Chinese market only has one speaker? Besides the old Wuling Hongguang, to find a "new car" with such a feature, you'd probably have to look among elderly mobility scooters.

However, Honda CR-V, Toyota RAV4, and Subaru Outback sold in the US dare to offer only one speaker in their "base of the base" models! The core issue is that these lowest-end models still start at $30,000.

As for the Avalon, domestic friends probably can't imagine a model without rear air vents. Even the low-to-mid-range versions of the Accord sold in the US don't have rear air vents. But in China today, besides the old Roewe Ei5, which is mostly used as a taxi, I've searched through various new gasoline and electric cars in recent years and only found the Lavida New Trend edition to be like this.

Image | It's currently not easy to find a new car without rear air vents in China. The image shows the Lavida New Trend edition.

However, the dealer price of the Lavida New Trend edition currently starts at just 69,000 yuan, equivalent to less than $9,500 at the current exchange rate.

Don't be surprised. Japanese cars sold in the US market are still in high demand despite this. But can we blame automakers? As businesses, their primary purpose is to maximize profits.

In a nutshell, since they've already tamed consumers and can make money effortlessly, why should they "compete"?

"The first dream I realized in the US was driving a Japanese-made Toyota Highlander, a mythical car with outrageous prices for second-hand models in China, which I acquired here for just $5,000. It's a 2006 model with 145,000 miles (over 200,000 kilometers) on the clock."

In mid-May this year, a popular new-generation "emigrant" announced this on their social media profile. This is not an article that criticizes or analyzes political views; I quote this example only to illustrate some stubborn commonalities between car owners in China and the US amidst significant