Ford to Export Taurus to Japan in Major Expansion
Ford Motor Co. will begin selling its Taurus automobiles in Japan beginning next February, marking its first organized effort in decades to export U.S.-made cars to Japan and representing a tenfold expansion for its Japanese outlets for U.S.-built cars.
Chairman Donald E. Petersen said Wednesday that “today’s more reasonable value of the dollar,” which could enable the firm to sell its products here for more than 40% less than exchange rates would have permitted two years ago, made possible Ford’s new export effort.
Japan, Petersen declared, has developed “potential as a receptive import market.”
Although Ford has not fixed a price for the Taurus in Japan, it hopes eventually to sell several thousand of its second best-selling product from 100 dealerships of the Autorama network. The 1987 Taurus sold in the United States for about $16,000. Autorama is owned by Mazda, of which Ford owns 25%.
As a step toward stemming the trade imbalance, Petersen urged Japan to consider a 600,000-unit reduction in the 2.3-million quota that the Tokyo government imposes on Japanese auto makers’ exports of passenger cars to the United States. The restraints are to end next March 31.
By the end of next year, Petersen said, passenger car factories with a capacity of 1.2 million units will have been added in North America since 1981, when the restraint program began. Nearly all the additional capacity has been built by Japanese makers, yet components that account for 50% of the value of cars the Japanese assemble in North America are imported from Japan, he said.
That is the equivalent of an extra 600,000 finished car exports, he said.
Petersen also said Ford and Mazda were considering using Mazda’s new 240,000-car auto plant in Michigan as a base for exports of Mazda-designed cars.
Last year, Japan imported a record 68,357 foreign automobiles, an increase of 36%, while exporting 4,572,791 million cars. But 53,916, or 79% of the imports, came from West Germany. The American share of car imports, which 10 years ago amounted to 35%, fell to a minuscule 3.4%, or only 2,345 cars, last year.
Imports through the first nine months this year amounted to 71,600 cars, with the monthly figure topping the 10,000-mark for the first time in September. Some analysts have predicted that foreign cars could seize as much as 5% of the market by 1990, compared to 1.7% (excluding midget cars with engine displacements of 550 cubic centimeters or less) last year.
Petersen predicted that by the early 1990s, 11 different auto firms will be selling their products in the United States and that “excess capacity directed at the North American market will be in the range of 5 million units.”
“The question is which companies will (be burdened with) that excess capacity,” he said. Past competition has tended to pit auto makers in Europe, the United States and Japan into groups competing against each other, but future competition, he predicted, will focus on individual companies.
Ford, he said, will not be one of the companies that gets stuck with excess capacity. He predicted that his firm will “sustain and grow from” its present 20% share of the American passenger car market and its 30% segment of the truck market in the United States.
