Japan Dumping Minivans, U.S. Officials Rule : Trade: The Commerce Department finding could lead to import charges on the popular vehicles.
Mazda, Toyota and other Japanese auto manufacturers have been dumping minivans in American markets at unfairly low prices, the Commerce Department said Friday in a ruling that could lead to import charges on the popular vehicles.
The preliminary ruling was an important victory for General Motors, Ford and Chrysler, the U.S. companies with more than 80% of the domestic market for the profitable vehicles.
Minivans are one of the few remaining segments of the auto market dominated by domestic companies, and Detroit is fearful of Japanese competitors’ penetration.
The Commerce Department said Japanese producers sell the vehicles in the United States “at less than fair value"--lower than the same vehicles are sold in Japan. The difference in price is called the dumping margin.
The estimated unfair price differences were 7.19% for Mazda minivans, 0.95% for Toyota and 4.23% for other Japanese manufacturers, the department said.
Because the Commerce Department has ruled against them, the Japanese firms must post a cash bond equal to the price difference. The department did not have a dollar figure on the price differences. The total value of minivans imported from Japan was estimated at $1.2 billion in 1990, it said.
Mazda said the ruling was “nothing more than a hollow victory for the Big Three.” The government’s finding of a 7.19% margin of unfairly low prices was far below the 30% dumping margin alleged in the complaint against Mazda, the company said.
“Nevertheless, we are disappointed, because we strongly believe that by any reasonable standard Mazda is not dumping minivans in the United States,” it said. “We will challenge the preliminary finding and expect it will be reversed.”
Toyota said: “We are quite pleased by the preliminary determination of the Department of Commerce. A Toyota margin of less than 1% compared with margins up to 30% alleged in the petition clearly demonstrates that the case had no factual basis.”
The Commerce Department will make its final ruling on the matter by May 11. If it upholds the preliminary decision, the case goes to the International Trade Commission for a final judgment.
If the ITC agrees that the Japanese are dumping, it could order collection of duties equal to the unfair margin. That would drive up the price of all Japanese minivans sold in the United States.
Friday’s ruling was welcomed by domestic auto firms and applauded by members of Congress concerned about the trade deficit with Japan.
The minivan case “is an illustration of the systematic pattern of trade cheating by Japan that must be stopped,” said Sen. Donald W. Riegle Jr. (D-Mich.).
“We need an overall solution to this predatory trade invasion by Japan,” said Riegle, who joined other Democrats on Friday in introducing a bill to force Japan to cut its trade surplus with the United States 20% a year for the next five years. If Japan fails to meet the yearly target, it would be forced to cut its U.S. auto exports. It could also satisfy the proposed legislation by using more American-made parts in Japanese cars assembled in U.S. plants.
The ruling “confirms that the pricing of these vehicles in the United States was deliberately set at a level below that in Japan in order to unfairly seek rapid market share increases at the direct expense” of U.S. firms, said Thomas Hanna, president of the Motor Vehicle Manufacturers Assn.
U.S. companies believe that Japanese firms have captive parts suppliers and can manipulate prices paid to those suppliers in order to disguise true costs of production.
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