My best friend is a marketing consultant who advised Toyota among many other companies over the past 5 years, and he consistently tried to point out (generally in vain) that Toyota’s Achilles Heel was the way the company overrelied on the debt-riddled US. UK, and Australian markets– sort of a microcosm for Japan in general, which is heavily attached to the United States and way over-invested in US T-bills (to the exclusion of other currencies and wealth stores).

To give one small example: Among Toyota’s international sales and marketing force (based in Japan), a decent majority speak competent English along with their native Japanese. But almost none of them– well less than 5%– are proficient in any of the other big languages of critical markets, such as Chinese or German (the effective lingua franca of Central/Eastern Europe), let alone Brazilian Portuguese or South American Spanish, also markets that haven’t been hit so hard by the recession. To the Japanese execs, it seemed, “international” was essentially tantamount to “English-speaking” (and the USA in particular), and that’s precisely the debt-strained market that’s been utterly throttled in Great Depression II. The Japanese companies (Honda/Nissan as well as Toyota) haven’t taken the other markets seriously enough– whether in language or other respects– and they’re paying a dear price for it, which is only going to get worse.

In stark contrast, the international sales/marketing team at Volkswagen is truly international, as he found out. Their members do a much better job specializing in a variety of regions and learning the relevant languages. Thus in addition to their native German (already an enormous market in Central and Eastern Europe) and many of course speaking English, the VW sales force has armies of people able to communicate and market in Chinese, Russian, Hindi, Portuguese, Spanish, French, even Japanese in Toyota’s own backyard. VW’s reach is therefore truly global, and they were brilliant to get such a strong foothold in the BRIC countries right off the bat– especially in China, India and Brazil.

It seems that more than a few consultants have been trying to communicate this to the top brass at Japan’s companies, but this only works if they’re smart enough to listen. One only needed to look at the dangerous debt levels in the USA and Britain to realize that any company would need better diversification out of these markets to be in decent shape. Those that failed to take the hint are now suffering the consequences, and it’s not going to get much easier for quite a while still.