Japanese Car Export Quota to Be Reduced

In what officials hope will forestall protectionist legislation in the United States and shore up uneasy U.S.-Japan relations, Japan’s Ministry of International Trade and Industry announced Thursday that it will cut its self-imposed quota on auto exports to America to 1.65 million in fiscal 1992 from the current 2.3 million.

Since Japan’s exports to the United States will reach about 1.73 million cars in the year that ends March 31, MITI’s decision will mean a 5% cut.

“We made the decision in view of the importance of co-existence and co-prosperity between Japan and America,” MITI Minister Kozo Watanabe said. He said the decision recognizes the importance of the auto industry to the United States, and he added that he hoped it will help support free trade.

While some analysts expressed concern over a growing trend toward “managed trade,” many executives seemed resigned to the need for government intervention in relations between Japan and the United States.

“While there is concern that the government’s decision may lead to a strengthening of managed trade,” Nissan Motor Co. President Yataka Kume said of MITI’s decision, “I believe it is based on a comprehensive assessment of the present state of strained relations between Japan and the U.S.”

Auto and auto parts account for two-thirds of America’s $40-billion-plus trade deficit with Japan and became the focus of President Bush’s visit to Japan earlier this year.

Hitoshi Nishiyama, an analyst at Nomura Research Institute, said a small increase in production at Japanese auto makers’ U.S. plants would offset the reduced exports.

Japan’s share of the U.S. auto market has risen steadily from 23.9% in 1988 to 30.6% last year.

Christopher Cedergren, an auto industry consultant with Auto Pacific in Santa Ana, said the quota would slow what had been dramatic growth in market share by Japanese auto firms in the United States.

Cedergren said Japanese auto firms now “will be a little less driven by market share and will focus more on profitability.” The result, he said, is that consumers are likely to see fewer rebates and other price incentives, although sticker price increases should not outpace those of domestic manufacturers.

Times staff writer Stuart Silverstein in Los Angeles contributed to this story.