(FORTUNE Magazine) – IN A QUIET SHOWROOM in a fashionable part of Seoul sit two lonely Honda Accords. How can that be? After all, South Korea bars all Japanese car imports in order to keep its $5.9 billion trade deficit with Japan from getting worse. That bureaucratic detail hasn't stopped Honda. In 1989, Daelim Motor, a Korean motorcycle maker that uses Honda technology, began bringing Accords from Honda's Marysville, Ohio, plant, 12,000 miles away. Bloated by tariffs and taxes, each car's pricetag is $36,000. Only 31 Hondas were sold in Korea last year, and the venture isn't likely to yield much of a profit anytime soon. But says S. C. Yun, Daelim's point man: ''Honda is preparing for the day it can export directly from Japan.'' Japanese patience pays off in East Asia, and Western managers can learn a few dos -- and some don'ts -- from the way they operate. Together South Korea, Taiwan, Hong Kong, and Singapore bought products from Japan worth some $57 billion last year, roughly as much as combined American exports to Germany, Britain, and France. Sony has built ten manufacturing plants in the Pacific Rim since 1985, mainly to supply the rest of the world. But Takao Yuhara, the / regional deputy managing director, says Sony's East Asian plants already sell 20% of their output within the area, a figure he believes will rise to 50% in just five years. Nissan sells nearly half as many pickup trucks in Thailand, the world's No. 2 market for pickups, as in the U.S., the No. 1. Meanwhile such Japanese retailers as Sogo, Yaohan, and FamilyMart are springing up all over Asia to sell products regardless of their origin. Japanese outlets in Hong Kong, for instance, control about half the territory's department store sales. Besides fast-food chains like McDonald's and Pizza Hut, the only major U.S. retailer with any visibility in Asia is Toys ''R'' Us. Says Kenneth L. Norton, a trade officer at the American Institute in Taiwan, the de facto U.S. embassy there: ''I wish American retailers had shown more of an interest in this market.'' To understand how Japan's winners are outselling the West, you have to step back from the battleground to see the whole war. Their success has little to do with new selling stratagems or marketing magic. Instead, what distinguishes the Japanese approach is an emphasis on flexibility, information gathering, and personal relationships. Squishy as they seem, these concepts are as central to Japan's selling successes in Asia as are its quality products. Consider the matter of how to enter a new market. Do you go with a wholly owned subsidiary, set up a joint venture, hire a local agent? Thailand, Indonesia, and other Pacific Rim countries often require -- or strongly encourage -- foreign investors to form joint ventures with local partners; it's a way of ensuring that domestic companies get a cut of the profits as well as access to foreign technology and managerial expertise. Japanese firms are far more inclined than most Western companies to accept whatever ownership terms are necessary. Says John Wong, group managing director of Singapore's Hong Leong Corp., a trading and manufacturing firm: ''The question of ownership never comes up when we're dealing with Japanese companies. It's kind of considered rude to ask for 51%. That's just not the way we, or the Japanese, do business.'' By contrast, U.S. companies are generally obsessed with the idea of owning a majority stake. ''Every proposal that comes across my desk, the Western company will say it has to have 55% of the deal,'' says Wong, who until a year and a half ago headed IBM's Singapore operations. AMERICAN companies sometimes opt out of promising markets rather than < sacrifice majority control. Blame accounting for some of this stubbornness: The parent can consolidate the joint venture's revenues on its financial statements only when the stake is more than 50%. In other cases the lust for majority ownership is traceable to the Foreign Corrupt Practices Act, the U.S. law that governs the conduct of American citizens and companies abroad. The presumption: If you own a majority of a venture's shares, you control it; if you control the venture, you can control your partner's behavior. The presumption, of course, is not necessarily true. Japanese firms are more likely than their Western counterparts to see their relationships as two-sided, with each partner bringing substantial worth to the venture. Listen to Koh Boon Hwee, who once headed Hewlett-Packard's subsidiary in Singapore and now serves as executive chairman of Wuthelam Holdings, a Singapore company involved in manufacturing and real estate joint ventures with several Japanese firms: ''The American attitude is 'What are the conditions? What do I have to do, and what do you have to do?' Japanese companies generally make better partners over the long term.'' The premium the Japanese place on good information -- how to approach potential customers, which bank to borrow from, what to bid for a piece of property -- frequently leads them to link up with companies run by Overseas Chinese. These ethnic Chinese families, sometimes generations removed from the Mainland, have business networks that extend into every major market in Southeast Asia. ''If we get inside these Chinese families, we can get inside information,'' says Eiichi Kitagawa, general manager of Mitsui & Co.'s corporate planning division. About half of Mitsui's more than 100 joint ventures in Thailand are with partners involved in the Overseas Chinese network. Japan Inc. also excels at plugging into local government circles, a not insignificant advantage in a region where governments restrict foreigners' ability to maneuver. Japan's clout can be explained in one word: money. In the most recent fiscal year, the country gave low-interest loans and other aid worth $3.3 billion to East Asian countries. Typically the money goes for infrastructure or construction projects, and Japanese firms often end up with the business. The U.S. gave only $414 million in economic aid. GEOGRAPHY unquestionably gives Japan an advantage in selling to its neighbors. Hong Kong is a four-hour flight from Tokyo, but 14 hours from Berlin and a bone-tiring 20-hour journey from Chicago. Says Russell Proctor, an executive with Eli Lilly in Seoul: ''They can pull a guy off a production line in Tokyo and fly him over and back in a couple of days for $500, while an American company might have to spend $5,000 or $6,000.'' Proximity of another sort may be even more important: cultural proximity. Different from one another as they indisputably are, Koreans, Chinese, and Thais have more in common with the Japanese (and with one another) than with any typical Westerner -- more religious customs, more linguistic affinities, more history. Not even the painful memory of World War II intrudes much when it comes to business relationships -- testimony to Japanese skill in avoiding situations that might rekindle old animosities. Occasionally, when all other considerations are equal, this cultural kinship can be decisive. Japanese managers seem almost unnaturally relentless when it comes to cultivating personal relationships with their customers, partners, and suppliers. S. H. Jang, a Korean consultant who at various times has headed the Korean operations of Sandoz, Johnson & Johnson, and Schering, recalls the time he visited a small Osaka company that sold Sandoz raw materials. Arriving at the offices late in the day, he and his colleagues were immediately whisked to a hot spring resort for a communal bath with their Japanese hosts, whom they had not met before. From there they proceeded to a sumptuous banquet, to be entertained by geishas who charmed the visitors with old Korean folk songs. Later everybody retired to a small bar for more song, dance, and drink. The following morning, as Jang and his bleary-eyed Korean managers sat down with their Japanese suppliers to talk about pricing issues, he says, ''we felt like we had been friends for ten years.''

To further these relationships, many Japanese companies leave senior executives in their Asian posts for six or seven years, compared with the three- and four-year periods that are more typical at Western firms. This gap, however, may be narrowing. Though impossible to document, many observers say Western companies are stationing expatriate managers for longer stints in recognition of the time it takes to get a handle on Asian markets. One key to such understanding is golf. American and European managers are inclined to view their club memberships as ''God-given rights to compensate them for the privations they have to endure'' in such a far-flung part of the < world, says David Lyman, an American lawyer who has practiced (law, not golf) in Bangkok for 24 years. By contrast, Japanese managers tend to regard such perks as essential business tools. Again, no one would claim to know for sure, but Lyman and others believe the difference in perspectives is lessening: ''Westerners are realizing that if you want to do business with the politicians and senior bureaucrats, you've got to play golf.'' Some Japanese companies are commonly believed to use less virtuous techniques to win favor. For instance? Japanese firms are skillful in solidifying relationships through ''small gifts for members of the family,'' says a Korean businessman. Other presents are less subtle: a Filipino manager in Manila, who used to represent a U.S. computer company, tells of a Japanese competitor's habit of giving local government officials expensive overseas trips ''just before they were to decide on a contract.'' NOWHERE is the contrast between Japanese and American approaches more evident than in Vietnam. A 1975 trade embargo prohibits Americans from doing business in Vietnam -- though it doesn't stop them from traveling there to make contacts. Even so, most U.S. firms seem inclined to wait not only for the lifting of the embargo but also for signs that Vietnam will become a significant market. Turn that strategy 180 degrees, and you have the prevailing Japanese view. ''I am totally impressed by their commitment to Vietnam,'' says John Wong of Hong Leong of Singapore. ''They are putting people in there who are not really doing business but who are laying the groundwork.'' Billboards in Ho Chi Minh City advertise Japanese products, the Vietnamese-Japanese Cultural Association offers Japanese lessons, and Japanese firms do business. Trade between the two countries totaled more than $800 million in 1990, making Japan Vietnam's largest trading partner. What's the lesson here? Should you book the next flight to Ho Chi Minh City? Spend more time on the links with your customers? Lay on geisha parties? Not necessarily. Most Westerners wouldn't want to wrap themselves in a kimono or sip sake till dawn -- if that's what it takes to win a deal. Some aspects of the Japanese way are worth emulating; some, like using payoffs to sway decisions, are not. The broader message is that Japan's edge in selling to its neighbors has come from understanding -- viscerally understanding -- its customers, suppliers, partners, regulators, influence peddlers, and competitors. Welcome to the neighborhood.

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