NOTHING VENTURED

Japanese quality with a Russian soul

If you’re still having doubts about whether or not it’s possible to do business in Russia, just look at ISUZU. This company is the perfect testament to the fact that doing business in Russia is great. Suffice it to say that ISUZU is currently the number one foreign company in terms of truck sales.

Information about ISUZU’s leadership was recently presented by the leading information agency “Autostat Info.” According to the agency, the Japanese company sold the most trucks compared to all foreign truck manufacturers, posting a growth rate of 7 percent. Last year the company also opened warehouse in Vladivostok in addition to Moscow. This enabled the company to cut down on delivery time for spare parts, as well as to expand the range of products by 20 percent.

So why is this famous Japanese company, which celebrated its 100 year anniversary last year, so successful in Russia? Jun Kimura, Finance & Administration Director of ISUZU RUS, answered this and other questions in an interview with Capital Ideas.

Mr. Kimura, what is the secret behind your company’s success in Russia?

It has to do with two key principles that we adhere to - excellent service quality for our clients and a wide range of products.

But you adhere to these principles on any market. Isn’t the Russian market different from Europe or the Middle East?

Of course the Russian market has its own features. To put it mildly, Russia is a fairly difficult country. As a representative of Sojitz Corporation, a minority shareholder of ISUZU RUS, can say that we always look at the local market from a long-term perspective.

When you say that Russia is a challenging market, what do you mean?

First, the sanctions, which have depressed the Russian market. And second, the legislative challenges, which, frankly speaking, is incomparable to those of other countries.

I’d like to ask you a question about mentality. Business is not just trucks, pickups, wheels and spare parts. Business is people. In my opinion, for example, it’s difficult to find two nationalities more different than Russians and Japanese people. But if you’re here, then we do have something in common, right?

You know, my experience is limited: I have only been working in Russia for a year. But what I have experienced and heard from colleagues who have been working here for a long time leads me to believe that the Russian mentality is quite similar to ours. Both Russians and the Japanese value personal relationships, and both are interested in developing long-term relationships.

So at the foundation of both business cultures is developing personal contact between people, establishing trust on a personal level, right?

Absolutely! Mutual trust between us and our clients is extremely important.

Last question about this topic - is it difficult to establish contact with Russians?

(Mr. Kimura pauses to think for several seconds)

Please answer honestly!

To be honest, such contacts really are difficult to establish at first. Especially when it comes to government officials. When it comes to private business representatives in Russia, it’s easy for us to find common ground. We speak the same language as Russian businessmen, since both of us are looking toward the future.

You call everything you make in Russia “Japanese quality with a Russian soul.” What does this mean?

It means that quality control of the final product is carried out in accordance with the Japanese standards of ISUZU Motors. But the products are assembled by Russian people, on Russian equipment, with a Russian approach at our plant in Ulyanovsk. So that’s why we have Japanese quality with a Russian soul!

People all over the world like to talk about the mysterious Russian soul. Do you think the Russian soul is mysterious?

I’ve only been here for a year, so it’s hard for me to judge. In any case, I have yet to encounter any of these mysterious aspects. (Laughs)

A more general question about relations between Russia and Japan. Recently it seems like they are improving. In December of last year, Vladimir Putin was in Russia and a Japanese delegation came to Moscow in the beginning of this year. Is there a positive trend in terms of trade and economic relations between our countries?

Yes, we can really see this. The meetings between Putin and Abe are opening new opportunities for us, private entrepreneurs.

But is there something that still gets in the way?

The biggest obstacle is the lack of transparency in Russian legislation. There are a lot of details that are unclear. But both of our governments are working on this problem.

This question is probably not for you, but I will ask anyway. Do you think the fact that the Russian President is a big fan of judo helps him understand Japanese people better?

Yes, judo is the true spirit of Bushido. The study of Bushido helps to better understand Japanese culture, history and Japanese people themselves, our mentality.

So far as I know, Vladimir Putin likes to read books about judo. He even has a sculpture of Kanō Jigorō, the founder of judo, at his house. Have you heard about this?

I haven’t, but if he does, that’s great! (Smiles)

What kind of advice would you give to Japanese businessmen who are planning to come to Russia?

Anybody who comes here has to be thinking about the long-term. You have to plan your business activity in Russia for several years in advance.

So it’s pointless to count on making a quick buck, right?

Yes. I’ll give you an example. Among other things that SOJITZ group (where I came from) is doing in Russia, we have a project - the development of an airport in terminal Khabarovsk. In spite of support from the Japanese government, we understand that this will take several years.

Why so long? It can’t be because Russia is so cold?

Generally speaking in Russia, planning takes a long time, construction takes a long time and waiting for profits to come in takes a long time.

In order for me to understand the reasons better, could you explain - a similar project in Europe or Japan wouldn’t take this much time?

Yes, it would not take as long to implement it there.

You’ve been in Moscow for a year. What do you think about this city?

My impressions of Moscow are much better than what I expected to see before I came here. I thought that it would be dark and cold here. But my wife and I are in Moscow and we’re happy with everything. We like going to museums and ballet , for example.

What happened between ISUZU and Sollers?

Sollers decided to leave. Instead of looking for a local partner as a replacement, ISUZU decided to expand its participation. We have a good local team here and excellent management. And we’re not afraid of continuing to work in this format.

Do you have a lot of hope about the future, or are you more cautious?

I have hope. I am very positive. Relations between our countries are improving. This year will be a year of transition, and next year will be great!

Note from Capital Ideas:

ISUZU RUS – ISUZU RUS is the official manufacturer and distributor of the Japanese brand ISUZU in Russia. The company was founded through joint efforts of two Japanese corporations - ISUZU Motors Limited (74% of shares) and Sojitz Corporation (26% of shares).

The company manufactures and sells the full range of ISUZU commercial vehicles weighing 3.5 to 33 tons and D-Max pickup trucks through a national dealership network, which currently amounts to 52 dealerships (including Kazakhstan and Belarus). The company’s production facilities are located in Ulyanovsk. ISUZU RUS employs a total of 246 people. The company’s branches are located in Moscow, Yekaterinburg, Novosibirsk and Vladivostok.

 

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