Says Japanese Rivals Have Lost Pricing Advantage : Iacocca Sees Big Year for Detroit
Chrysler Chairman Lee A. Iacocca, expressing Detroit’s current cocky outlook, said Wednesday that falling oil prices, the weakening dollar and continued restraints on Japanese auto imports foretell a banner year for American auto makers.
He said Japanese car prices have increased about 5% since the dollar began to slide last fall and predicted that they would climb another 10%. The yen has grown 25% in value against the dollar since September, when U.S. officials undertook an effort to weaken the dollar against the currencies of major trading partners to make American products more competitive.
“That’s leveling the playing field,” an ebullient Iacocca told a Los Angeles press conference. “Now watch our smoke.”
He said that, in the past several months, the Japanese car makers’ $2,500-a-car pricing advantage had evaporated because of the strengthened yen, U.S. auto makers’ sales incentive programs and lower American production costs.
Iacocca hinted that Chrysler would introduce a new price or financing incentive program when the company’s current 8.6% financing plan expires Friday.
“We’ll come out swinging Friday,” he said. “We are leaders in price wars.”
General Motors on Monday announced a 9.9% financing program for most of its model lines.
Iacocca’s comments on the state of the industry mirrored those of GM Chairman Roger Smith, who two weeks ago said Japanese auto makers are headed “into the swamp” because of the swing in exchange rates and the growing American appetite for gas-guzzling high-performance and luxury cars.
Iacocca and most of Chrysler’s top brass were in Los Angeles to introduce several new 1987 car models, which will begin appearing in showrooms this summer.
Other Iacocca comments:
- “I got mugged by some guys in Washington,” he said, referring to his recent firing as director of the fund-raising drive for the Statue of Liberty. He said he has received several thousand “indignant and vitriolic” letters from people who objected to his dismissal by Interior Secretary Donald P. Hodel.
- “Cheap gas is nothing but a drug habit. We’re going to get hooked again, no doubt about it,” he said, advocating higher federal taxes on gasoline.
- “Since we won’t set our own trade policy, they (the Japanese) will set it for us,” accusing the Reagan Adminstration of short-sightedness.
- “I would never go down there,” he said, responding to a question about possible political ambitions in Washington. “It’s a tough town. I’d rather be in Dodge City shooting it out.”
