Caterham Cars Japan
“We shifted 48 cars in 2009,” says Justin Gardiner with a grin on his face. He’s not being smug. He’s just genuinely proud of the fact that in his first year as brand manager with Caterham Cars Japan, the company more than doubled its sales. “You could say we bucked the trend of the world auto market, which, for example, saw Toyota sales plunge from 10 million vehicles to 6.5 million.”
Well, you could say that, but British firm Caterham Cars is not competing at the mega-volume range of Toyota, GM or BMW. In fact, they’re not really competing with them on any level – or, indeed, with anybody else.
Caterham Cars serves a niche market – a niche market of around ¥200 million in Japan. The company sells, in effect, one model of car: the two-seater, open-topped Caterham 7, based on the famous Lotus 7 of years gone by. In some ways, it’s the same car that Lotus legend Colin Chapman first put on the market in 1957. But Caterham, which took over production in 1973, has updated it, modernised it and globalised it. The Caterham 7 is still the rip-roaring roadster it always was. It’s an analogue car in a digital world, and its owners dedicate their lives to it.
Gardiner says that Caterham owners are like a little club, a factor that restricted sales in the past. The sales effort was so weak, there wasn’t even a brochure for the car.
“There was no marketing and no advertising; they were just waiting for customers to walk through the door,” Gardiner explains. When that happened, Japan would dial England, order up a car and wait for it to be sent over on a boat.
“They were brought in one by one,” he says. “Now, we bring them in five at a time to save on shipping costs.” On arrival, the cars are put through a pre-delivery inspection to check for any faults before the dealer and the customer get hold of the car. In terms of selling, Caterham’s sales arm in Japan doesn’t wait for blokes in tweed caps to walk through the door and hand over ¥4 million; they import them from their UK base in Surrey (at Caterham, of course) and go about the usual process of looking for customers and promoting their product.
Caterham chose wisely when appointing Gardiner as its brand manger. He was well known as an auto journalist and the thought of selling something as British as roast beef in Japan really appealed to him.
“Being a thoroughbred British product is really a great selling point,” emphasises Gardiner. “Many dealers really go to town on the ‘Britishness’ of the product – they have Union Jacks, old BP petrol pumps and British racing harnesses.” (Japanese law requires that inertia-reel belts are also installed.) British racing green is by far the most popular colour for the car. In addition, Gardiner points out, so much of the “British” auto industry isn’t really British anymore. Rolls-Royce, Bentley and Mini are German; Lotus is Malaysian; and Land Rover and Jaguar are Indian.
Ironically, a less attractive British factor – the UK’s faltering economy – has also helped to sell cars in Japan.
“When we took over on 1 January 2009, we looked at the price of Caterhams in Japan and in the UK, and saw a big gap,” explains Gardiner. “It was partly due to the exchange rate and partly because the previous company was looking at low sales and a higher margin. Bringing in the cars five at a time reduces the import cost and the need for a bigger margin, while the exchange rate for the pound has made an enormous difference. We gambled that the yen would stay strong, and it’s paid off. We reduced prices by 35% and more than doubled sales.”
Other importers, Gardiner points out – this time with a quite obvious smug grin on his face – didn’t do that, and kept the price of their vehicles higher than they should have been. But Gardiner predicts that economic realities will change the picture in 2010 and sales are likely to decline from last year’s high.
The collapse of the auto market last year had another spin-off effect that greatly benefited Caterham. At the 2009 Tokyo Motor Show in October, almost nobody else showed up. Well, nobody from overseas.
“There was no BMW, no Ford, no Mercedes, no Volkswagen – the only foreigners to show up were Alpina, Lotus and Caterham,” recalls Gardiner. “It was a huge scoop for us because if the big boys had been there, none of the journalists would have come to our stand. Instead, every newspaper, magazine and TV station came over to ask why we were here. We said Japan is the most important overseas market for Caterham and they took pictures of the cars, wrote reports, put it on TV, and it paid for itself over and over.”
In addition to general news outlets, Gardiner has used his media connections to great effect for Caterham.
“I was able to get coverage from the high-end magazines down to the convenience store stuff,” says Gardiner. “We also increased our advertising. Now we are trying to cultivate connections with the fashion industry and men’s fashion magazines. Many people are into British things such as tweed caps, Paul Smith, etc. Old Minis are still popular, but the 7 is becoming an even cooler motoring icon. So we hope that paying attention to the fashion gurus will help to open up a new market, which up to now has basically consisted of men moving out of middle age.”
“Cars are meant to be fun”
Caterham operates a one-day rental system so that potential customers can try the car out without a salesperson looking over their shoulders, and they also organise track days at circuits such as Sodegaura in Chiba and Fuji Speedway in Shizuoka, where they teach people how to handle a high-performance car. (The 7 is one of the fastest sports cars in the world.)
“The 7 doesn’t have traction control or servo-assisted brakes, and that can be a bit of a shock for people at first,” Gardiner points out. “The idea is to show that cars are not just a utility to get you from A to B; they are also meant to be fun. You should enjoy driving.”
Gardiner jokes that he copied his sales tactics from London drug dealers. “It becomes an addiction!” he states. “The reality is we want to attract younger drivers, but young Japanese guys are not so interested in sports cars.”
Gardiner’s biggest coup to date was at last year’s Japanese Grand Prix when 2009 Formula 1 champion Jenson Button did his pre-race exhibition lap in a 7.
“The TV announcer said: ‘There’s Jenson Button in a Lotus 7, the only road car to compete in a Formula 1 race, and they are still available today.’ ”
There is, however, a possibility that they won’t be available tomorrow. Japanese crash laws are being tightened and in 2012 all sports cars in Japan will have to comply with pedestrian impact tests, something that the 7 – along with Ferraris, Porsches, Lamborghinis, Lotuses and others – will have difficulty doing.
“Up until now, doing business in Japan has been easier than doing business in the UK,” Gardiner says. “I’ve been pleasantly surprised working with the authorities here. Everything’s been very straightforward and clear-cut.” The manufacturers of several sports cars have petitioned JETRO to make an exemption of the tests for certain sports cars. Should they fail, the 7 may be rarer than it is today on the roads of Japan.
“We don’t sell the 7 on its looks so much,” Gardiner says. “It’s about the hardcore experience of driving and feeling the sports car battle the elements – and being able to outpace Ferraris and Porsches.”
Gardiner smiles as he drives away with a roar from the exhaust and a twitch of the rear wheels pushing out the back end. If that’s a smug look on his face, it’s the look of a man in his element.