U.S. wood exporters lock up Japan's window and door market - includes related article on doing business in Japan

The fast-growing market in Japan for imported wooden doors, door frames and windows has exceeded $200 million during the past two years.

U.S. exporters have been busy nailing down market share of these wood products, though the competition is tough. U.S. wood window exports tripled from $12 million in 1992 to $39 million in 1997; wood doors and door frames increased almost fivefold to $52 million. These figures translate to mega import market share for these U.S. products - 59 percent for windows and 37 percent for doors and door frames.

U.S. exports of wood windows and doors did fall 12 percent in 1997 due to the downturn in the Japanese housing market and the weakening yen.

What's driving the strong market for U.S. wood windows and doors? For one thing, popular imported housing packages often include these products. Then too, more 2x4 framed houses are built with imported wood windows and doors. Several U.S. companies have established a strong presence in Japan to service this growth.

Lastly, the Japanese government is encouraging Japanese home builders to construct energy-efficient houses, thereby upping demand for energy-efficient wood windows. This trend is particularly evident in Japan's northern areas.

Don't Shut Out the Door Market

In 1995, Japanese production of wood doors and door frames was about $3.3 billion, accounting for more than 93 percent of the total market. Most of these wood doors were installed for interior use, since, until recently, fire codes usually precluded their use as exterior doors.

Sales of doors imported from the United States mostly hinge on how well the imported housing market is doing, since most of these products are now installed in North American-style housing.

Although overall growth of the total door market is sluggish, the wood door import market grew fourfold between 1993 and 1996, when total sales reached $134 million. Even with last year's 15-percent drop in housing starts, wood door imports increased another 5 percent to $141 million.

In 1997, wood door imports from the United States were $52 million, down slightly from $56 million the year before. But the United States retained its lead import status with a 37-percent market share, followed by Indonesia with 15 percent and Canada with 11 percent.

Import Market for Windows Wade Open

Overall window sales in Japan in 1996 were estimated at $4 billion. Imported wood windows can claim only 2 percent of this market.

With an average annual increase pegged at 50 percent since 1993, imported wood windows have been playing catch-up with other windows made mainly from aluminum and, increasingly, from vinyl. Imports of wood windows in 1997 totaled about $66 million.

Since 1992, several major U.S. wood window manufacturers have pushed strong marketing efforts in Japan. Now U.S.-made wood windows, with a technical and cost advantage, dominate the Japanese wood window market with 47 percent of the total sales.

Of that imported share, U.S.-made wood windows comprise 59 percent, followed by Scandinavian windows with 18 percent and Canadian with 16 percent. Checking out the competition: Canadian wood windows are similar to U.S.-made windows in design, while the top-quality Scandinavian wood windows are popular for use as roof windows.

Windows manufactured in Japan tend to be expensive since many are made to order, some with costly European hardware. But there are indications that Japan's major aluminum frame window manufacturers are investing in wood window production, which would make the wood windows produced in Japan more competitive.

Wood Competes With Aluminum, Vinyl

Wood window sales are still minuscule when compared to aluminum windows, with a 90-percent market share, and vinyl windows, with an 8-percent share.

While Japanese builders and homeowners are becoming more aware of the energy-efficient, airtight and soundproof properties of wood windows, exporters also need to promote their wares. The huge post-and-beam housing market is a likely prospect for increased sales; at this time, Japanese double-sliding aluminum windows are usually installed in these homes.

In areas designated as fire or quasi-fire protection districts, fire-rated windows must usually be used. This designation covers much of the residential housing in major cities.

This issue has been the focus of bilateral technical talks, particularly regarding certification to the Japanese standard and transparency of the certification process.

What Sells in Japan

The Japanese consumer appreciates U.S.-manufactured wood windows and doors for their good insulation, low cost, attractive colors and design. Casement and double-hung windows are popular with cost-conscious home builders for use in imported and 2x4 framed houses.The more expensive bay and bow windows are gaining popularity too. Double-sliding windows, a common fixture in traditional Japanese homes, dominate the market.

As for doors: If U.S. manufacturers want to make inroads into Japan's still massive post-and-beam market, they must sell doors in a wide variety of heights and widths. Standard U.S. sizes suffice for use in 2x4 framed houses and imported houses, but different sizes are used by Japan's post-and-beam builders. To compete in the post-and-beam market, U.S. exporters must maintain an inventory sized to fit these homes.

Another market consideration: extreme wet weather conditions necessitate highly water-resistant windows. To make sure their products meet the watertight needs of their customers, manufacturers might want to export only products rated against water infiltration by, the American Society for Testing and Materials.

Finally, Japanese buyers place a great emphasis on flawless appearance, zero defects, and after-sales service. Commitment to meeting these demands will be crucial as third-country and Japanese producers step up their efforts to compete with U.S. companies for this growing segment of the window and door market in Japan.

RELATED ARTICLE: Doing Business in Japan

U.S. exporters who plan to enter the Japanese market should keep the following hints in mind:

* Use home consolidators. A good price and reliable delivery are the most important competitive factors for imported wood windows and doors. In-country agents or distributors who can warehouse some inventory in Japan can provide this critical service.

* Hire in-country representatives. Japanese-speaking staff who understand Japanese regulations, business practices and the special needs of companies are essential. Also very important are Japanese-language installation instructions and training materials.

* Promote your products, Research pays off - before developing advertising and promotional materials. Visit trade shows and model home parks to familiarize yourself with the market.

Craig Jenkins is an agricultural economist with the Fisheries and Forest Products Division of the Foreign Agricultural Service. Tel.: (202) 720-0770; Fax: (202) 7208461; E-mail: jenkins@fas.usda.gov

COPYRIGHT 1998 U.S. Department of Agriculture
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