Minivan ‘Dumping’ Charge Investigated

The Commerce Department launched an investigation Thursday into Big Three auto makers’ charges that Japanese companies are “dumping” minivans in the United States at below cost to boost market share.

The investigation was requested three weeks ago by General Motors Corp., Ford Motor Co. and Chrysler Corp. through the Motor Vehicle Manufacturers Assn., a lobbying and research group.

“We believe the department’s ensuing investigation will confirm the extensive evidence supplied in the petition that Japanese producers of minivans are engaged in predatory pricing practices in violation of U.S. and international trade laws,” said a statement read by MVMA spokesman Bob Roach.

It was expected that the International Trade Commission would take testimony today from representatives of the Big Three and the Japanese companies as the investigation begins.

The ITC will make its preliminary decision by July 15. If it determines injury, the case goes back to the Commerce Department to decide if tariffs should be imposed.

The four Japanese producers named in the complaint have denied dumping. “We firmly believe that there is no evidence of dumping,” a spokesman at Toyota Motor Corp. said.

The Big Three allege that Japanese auto makers--Toyota Motor Corp. and Mazda Motor Corp. in particular--are selling minivans at prices below their production costs in an effort to grab market share.

Through the first five months of this year, the Big Three held 86.1% of the minivan market, and the Japanese had 13.2%.

Chrysler held 46.8%, by far the largest chunk. GM held 22.4%, Ford 16.9%, Toyota 6.6% and Mazda 6.4%. Nissan and Mitsubishi held tiny portions.

Chrysler is particularly sensitive to minivans. Not only does the company hold the lion’s share of the market, but the financially struggling auto maker relies heavily on minivan profits to support its bottom line.

Toyota countered with a statement calling the allegations absurd.

The complaint alleged that Toyota was selling its Previa minivan to dealers at 5.4% to 30.5% below fair value. Mazda, according to the Big Three, was selling its MPV to dealers at 14.8% to 27% below fair value.

The highly profitable minivan market is one of the few segments of the U.S. auto industry that domestic producers still dominate.

But Japan has been gaining a bigger share, selling 12.5% of minivans domestically last year, up from 4% in 1988, according to U.S. manufacturers.

The Big Three and the MVMA are asking the Commerce Department to impose duties on companies found to be dumping minivans in the United States.

An investigation into the allegations is expected to take about a year.