Japan Extends Voluntary Quota on Car Exports to U.S. : Autos: The decision is considered symbolic because of declining U.S. demand and increasing Japanese auto production in America.


The Japanese government announced Wednesday that it will extend its self-imposed quota on exports of cars to the United States for another year, a symbolic move apparently aimed at cooling trade friction rather than imposing any immediate restraint on trade.

Hikaru Matsunaga, the minister of international trade and industry, said at a news conference that the voluntary ceiling of 2.3 million autos will continue for the next fiscal year, which begins April 1.

However, it is extremely unlikely that the decision will affect trade flows. For the last two years, Japanese manufacturers have not exported enough cars to the United States to trigger the restraints, partly because of the shift by Japanese companies to production in the United States and partly because of the decline in demand in the U.S. auto market.

"I don't see any economic justification for this; I think it's aimed at the U.S. Congress," said Keisuke Kasugi, an auto industry analyst in Tokyo for the brokerage W. I. Carr. "It would be politically impossible to abolish the quota at this time."

Matsunaga's Ministry of International Trade and Industry, or MITI, persuaded the Japanese auto industry to accept a program of "voluntary" self-restraint in 1981, when troubled U.S. car makers were rapidly losing market share to a flood of Japanese exports.

Japanese industry leaders now dismiss the quotas as obsolete, however, especially since exports are steadily on the decline with the major manufacturers operating plants in the United States. Japan is expected to ship an estimated 2.05 million cars to the U.S. market in the fiscal year that ends March 31, down from 2.18 million units in the previous year, Matsunaga said.

Shoichiro Toyoda, president of Toyota Motor Corp. and one of the most outspoken critics of the quota, told reporters that he found MITI's decision "regrettable." But he conceded that it was made "after a comprehensive review of the existing state of relations between Japan and the United States."

Matsunaga said the softening U.S. demand for cars, expected to fall to 9.5 million to 9.6 million units this year from last year's 9.9 million, was a major consideration for leaving the quotas intact.

"The decision was made in consideration of various factors such as the demand outlook . . . foreign exchange fluctuations and Japanese cars in stock in the United States," Matsunaga said.

The recent decline in the value of the yen against the dollar has raised concern that Japan's foreign exchange advantage--leading to lower prices abroad--may once again spark a surge in Japanese car exports. Automobiles remain the largest component of Japan's $50-billion trade surplus with the United States.

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