Car Technology Turnabout : Japan to Buy 20 Methanol-Burning U.S. Vehicles for Test Project

In an unexpected and potentially far-reaching move, the powerful Japanese Ministry of International Trade and Industry wants to buy $1 million worth of U.S.-built methanol-fueled vehicles.

It would be the first time that Japan has sought to import U.S. clean-fuel technology and could offer beleaguered American auto makers at least a showcase in the coveted but nearly impenetrable Japanese vehicle market.

The 20 vans and station wagons would be added to an existing fleet test being conducted with 32 Japanese methanol cars at Japan’s Petroleum Energy Center in Tokyo.

“We want to use other countries’ new vehicles, especially Ford or GM,” said Tadashi Hoshino, a center official reached in Tokyo on Thursday. Hoshino said relatively heavy vehicles--perhaps to include a methanol school bus--were of primary interest as potential replacements for Japanese vans, many of which run on smog-producing diesel.

Japanese auto makers now lack the production capacity to produce the cars, said Masayasu Ishiguro, a senior consultant at Nomura Research Institute Ltd. and the Japanese official who first broached MITI’s interest.

Although some observers see Japanese interest as a possible toe into the tent of the Japanese auto market, others view it as a way for the Japanese to inspect U.S. methanol technology--while encouraging Japanese auto makers to speed commercialization of their own vehicles and take advantage of the U.S. market.

“This is a wake-up call for the U.S. auto industry,” said Gregory Mignano, executive director of the California State World Trade Commission. “Japan Inc. is positioning itself to dominate the clean-fuels vehicle market. . . . This could provide an opportunity for the U.S. auto industry if it quickly commercializes these technologies and if the U.S. government continues to put very strong pressure on Japan to open its markets.”

California-inspired clean-air rules are being so widely adopted that by some estimates, cleaner-burning cars could make up 50% of the U.S. market by the end of the decade.

Neither Ford nor GM had been formally contacted Thursday by the Japanese government.

“But we are always looking for a way to open up the Japanese market to our automobiles,” said David Sloan, spokesman for GM’s advanced engineering staff, which developed the Chevy Lumina, the first U.S. methanol car to be built on a production line.

“I wonder if they want to take a look at our sensors,” Sloan mused, referring to the high-tech devices used to monitor engine performance.

Sloan was also puzzled by MITI’s preference for vans and station wagons, since GM produces only the Lumina sedan for methanol use.

Word surfaced in a letter faxed Wednesday from Ishiguro to a colleague and personal friend for the past decade, Paul Wuebben of the South Coast Air Quality Management District, which enforces clean-air rules for much of Southern California.

“Once it is confirmed that the U.S. auto makers are interested in exporting such vehicles,” Ishiguro wrote, “we (myself and the concerned MITI personnel) intend to visit the United States for talks with them.”

“I didn’t know who to contact in the United States,” Ishiguro said Thursday, adding that the Japanese team hoped to come to the U.S. early next month.

While all nine Japanese auto makers are developing their own methanol-fueled vehicles--and have built prototypes for testing programs in Japan and the U.S.--none expect to have assembly lines working before 1994 or 1995, Ishiguro said.

“It’s the first time that MITI, the major instrument for industrial policy in Japan, has made a formal public request for importation of U.S. alternative vehicles,” Wuebben said. “They’ve never come forward and said that their manufacturers can’t perform.”

The U.S. auto industry has long hoped to find export markets to improve the economics of building alternative-energy vehicles--not to mention cracking the Japanese auto market by any means. Japanese auto makers now control 20% of the U.S. market, while the Big Three Detroit auto makers account for a mere 0.33% of the Japanese car market.

“You can clean the air and also enhance American business,” Wuebben said. Others were less optimistic.

“They are seeing what the state of U.S. technology is, and they can borrow from that,” said Edward Sullivan, an auto industry analyst with the WEFA Group, a Philadelphia-based economic forecaster.

Scott F. Merlis of Morgan Stanley dismissed the Japanese interest as “a symbolic move to show that they’re fair traders.”

Still, since the vehicles would be tested and given permits to operate in Japan, that could itself open the door a crack, some U.S. and Japanese officials speculated.

“I think that would be a good chance for U.S. automotive companies,” Yukiko Araki, a deputy director of MITI, said in Tokyo Thursday.