Japan Warns Its Auto Makers to Use Restraint
Japanese officials warned Japanese auto makers and their U.S. partners Saturday to refrain from unleashing “a flood of exports” to the United States in the wake of President Reagan’s decision not to seek a fifth year of passenger car export restraints.
Keijiro Murata, minister of international trade and industry, told reporters that “it is clear that a flood of exports after the restraints are lifted (April 1) is not desirable.” He added: “It is important that the automotive enterprises of both Japan and the United States conduct exports (from Japan) with prudence based upon good sense.”
Murata did not name any American auto firm, but General Motors, for more than a year, has sought to increase, by about 233,000 units a year, its purchases of passenger cars from Isuzu and Suzuki, the Japanese firms in which it holds a minority equity interest.
Chrysler’s About-Face
Chrysler, which had advocated keeping the quotas in effect at virtually the same level as at present, did an about-face last Thursday, announcing that it wanted to procure an extra 200,000 passenger cars a year from Mitsubishi Motors, in which it owns a 15% share.
A Chrysler vice president, Robert Miller, made that disclosure in testimony before a subcommittee of the House Ways and Means Committee.
Murata’s comment is seen here as an explicit warning to auto makers of both countries that the Ministry of International Trade and Industry might intervene to control exports if an explosion of shipments occurs after April 1. Under the restraint program that will end March 31, eight Japanese auto makers are allocated specific quotas for exports to the United States. The total limit is 1.85 million cars.
Takao Fujinami, chief Cabinet secretary, also issued a statement, saying that “prudent exports based upon good sense” would be “important.”
‘Self-Restraint’ Urged
Fujinami said the government will let each firm decide for itself what reaction to take to the lifting of the quotas. But he added that the firms should react “with a feeling of self-restraint.”
Fujinami, who acts as coordinator of Cabinet activities on behalf of Prime Minister Yasuhiro Nakasone, also declared that Japan will continue to go forward with measures to open Japan’s market to imports, especially in the field of telecommunications equipment, as Nakasone promised Reagan in Los Angeles on Jan. 2.
Takashi Ishihara, president of Nissan Motor Co. and chairman of the Japan Automobile Manufacturers Assn., said in January that exports would increase by “10% to 15% at most” if the restraint program were ended. But William Brock, U.S. trade representative, later predicted a 40.5% increase, amounting to about 750,000 units.
Japanese officials gave no indication Saturday of the size of an increase they consider likely to fall within the bounds of “prudence.”
GM’s Expectations
Roger B. Smith, chairman of General Motors, has declared that GM wants to import 200,000 cars a year from Isuzu, in which it holds a 34% share, for sale as Chevrolet Spectrums, and another 100,000 cars from Suzuki, in which its owns a 5.3% equity interest, for sale as Chevrolet Sprints.
Quotas which the ministry imposed on Isuzu (49,520) and Suzuki (17,000), however, fell more than 233,000 units short of the goals Smith announced.
Of Mitsubishi’s quota of 122,600, Chrysler is now receiving 87,500 for sales through its distributors, while Mitsubishi’s own dealer network in the United States is handling the remaining 35,100 cars. Miller told the House subcomittee that Chrysler intends to ask Mitsubishi to supply it with a total of 287,500 cars a year.
These potential new exports by the three Japanese firms to GM and Chrysler alone add up to an increase of 433,000 units, or 23.4% above the present quotas.
For the other five exporting firms, present quotas are: Toyota, 551,790; Nissan, 487,040; Honda, 372,340; Mazda, 173,460; and Fuji Heavy Industries (Subaru), 76,250.
