GM Getting on Right Side of Hard-to-Pierce Japan Market : Autos: It will switch steering wheel in 20,000 Cavaliers to be sold as Toyotas. The move could triple its exports by 1996.
General Motors Corp. said Friday that it will build 20,000 right-hand drive cars to be sold as Toyotas in Japan, an unprecedented move that could triple GM’s U.S.-built exports to Japan by 1996.
The agreement marks the first time a Japanese manufacturer has agreed to sell a vehicle made by a U.S. auto maker as its own. The deal is likely to contribute to an easing of tensions over U.S. complaints that the Japanese auto market is closed to competition.
“It doesn’t break down the wall, but it certainly penetrates it in a significant way,” said Chris Cedergren, analyst for AutoPacific Group in Santa Ana.
GM sold 9,000 U.S.-made cars last year in Japan, and 1993 sales are expected to be less than 8,500.
The company will produce the Chevrolet Cavaliers in Lordstown, Ohio, or Lansing, Mich. The car is being updated for the 1995 model year, and the new model has gotten high marks from analysts who have seen it.
The compact sedans and coupes, which will be sold through selected Toyota dealerships, are expected to be priced at less than $10,000 and positioned between Toyota’s popular Corolla and Camry, analysts said.
“It is a good way to do it,” said David Cole, director of the University of Michigan’s Office for the Study of Automotive Transportation. “It’s really low-cost because it uses Toyota’s distribution system.”
The agreement is the latest in a series of joint ventures between GM, the world’s largest auto producer, and Toyota, the third-largest. The two companies jointly operate a plant in Fremont, Calif., and have a similar partnership in Australia.
Discussions on the latest venture between GM Chief Executive John Smith and Toyota President Tatsuro Toyoda began more than a year ago. The two men said success would depend on GM’s ability to produce quality cars and Toyota’s dedication to selling them to Japanese consumers.
According to Smith, the agreement demonstrates that the “U.S. has closed the competitive gap with Japan and . . . can compete anywhere in the world.”
Toyota officials said the venture will beef up the Japanese firm’s product line, open up Japan’s domestic market and ultimately lead to the expansion of trade between the United States and Japan.
“I believe this project will bring about many good effects as a new exemplar of industrial cooperation between Japan and the U.S.,” Toyoda said.
The agreement comes as Asian-Pacific political leaders meet in Seattle to discuss trade and economics and U.S. and Japanese officials are in talks about reducing the $50-billion U.S. trade deficit with Japan. About 75% of the deficit is related to autos and auto parts.
