Getting Through the Fog in U.S.-Japan Car Talks
As the United States and Japan resume talks today in Geneva on their dispute over auto trade, both sides can be counted upon to stretch the truth.
In this long-running fight, the two sides generally agree on what the facts are. But in the battle for public opinion, they portray those facts in such dramatically different ways that it can seem that one side or the other must be wrong or simply lying.
Here is a quick guide to some of the noisiest claims and counterclaims:
* American efforts to sell right-hand-drive vehicles: As proof that U.S. marketing efforts in Japan are serious, Washington points out that Big Three car makers offer 59 right-hand-drive models in Japan. It also says the Big Three are selling 55 models with engine displacement of less than two liters, a type that accounts for 80% of the Japanese market.
However, only two of the right-hand-drive models and none of the U.S.-brand cars of less than two liters of engine displacement are made in the United States.
Washington counters, “So what?” The American concern is for fair market access for foreign models, wherever they are made. Japan replies that Detroit’s Europe-sourced models do nothing to redress the U.S.-Japan trade imbalance.
* Dealer access for foreign cars in Japan and dealer access for foreign cars in the United States: Washington says that in the United States, 80% of all dealers carry imported cars but that in Japan, ties between manufacturers and dealers prevent foreign cars’ getting fair access to showroom space.
Tokyo would rather talk about the percentage of dealers that sell both domestic and imported cars. It claims this figure is approximately 20% in both the United States and Japan. A top Japanese bureaucrat, attempting to illustrate that Tokyo dealers are open to handling Detroit models, cited a recent survey showing that 38% would be willing to sell foreign cars “if competitive, popular and attractive models were available.”
* Percentage of foreign penetration of the Japanese auto market: The United States says the foreign share of the Japanese automobile market is only about 4%, and Japan says it is 8.7%.
The difference is easy to explain. The United States is measuring foreign imports into Japan as a share of 1994 sales of all cars, mini-cars and trucks.
Japan argues that because imported vehicles consist almost entirely of passenger cars, the proper measurement is the foreign share of Japan’s regular passenger car market. This figure was 8.1% in 1994 and 8.7% during the first four months of this year.
Japan further points out that in the size category where foreign manufacturers have made their greatest effort in Japan--cars with engine displacement of more than three liters--the foreign share of the passenger car market in 1994 was 52.9%, including 28% held by Detroit’s Big Three.
The big-car market for Japan is minuscule, accounting for less than 3% of all cars sold there.
* The degree to which the Japanese auto market is open or closed: The United States argues that since the foreign share of auto sales in the United States is 33% and the foreign share in Japan is only 4%, the Japanese market is clearly closed.
Japan, however, points out that Detroit’s Big Three import nearly twice as many cars to the United States, primarily from their own assembly plants in Canada and Mexico, as Japanese manufacturers send to the United States.
