The US Sees Need for Fairer Auto Export Policy to Japan

AMERICAN automobile manufacturers are hoping that the Japan-United States talks starting tomorrow will open Japanese doors to trade - rather than limit that country's car sales in the US. And they would like US negotiators to walk away from Japan with no deal rather than a weak one.

Automotive trade accounts for more than 60 percent of the US trade deficit with Japan. That deficit - more than $54 billion last year - clearly must be reduced, says Andrew Card, president of the American Automobile Manufacturers Association, which represents Ford, General Motors, and Chrysler. The marketplace also must be monitored in terms of vehicles actually purchased, not just imported and kept in the back of showrooms, he says.

``Our [goal] is to get the same type of access that the Japanese had when they entered our market,'' says Mustafa Mohateram, general director of economics at GM. This would include penetrating Japan's dealership network.

The US allowed Japanese manufacturers to essentially ``piggyback'' onto existing US car dealerships, he says. In Japan, manufacturers own all or part of Japanese dealerships.

Although no written rules prohibit Japanese dealers from carrying imports, strong dealer-manufacturer relationships seem to affect their willingness to handle imports.

Despite Japanese rhetoric that their market is open, in reality it is ``absolutely closed,'' says Ford spokesman Al Chambers.

A report commissioned by the US and Japanese governments confirms some of US automakers' complaints. The study finds that US cars sell for approximately 40 percent more in Japan than in the US. Only 40 percent of Japanese dealers handle imports (including US vehicles manufactured in Japan), compared with 94 percent of American dealers.

The report also finds that 45 percent of Japanese consumers would consider buying an import. However, non-tariff barriers such as lack of service networks and inadequate parts supply - as well as price - make US imports less attractive.

Japanese dealers ``need a signal from the government that it's acceptable'' to sell US vehicles, Mr. Mohateram says. Trade talks should establish a quantitative target for imports, not just abstract agreements, he says. Prices could be brought down in part by allowing US exports the less demanding certification process allowed for Japanese exports.

Auto manufacturers want 100,000 cars to be sold a year within the next three years, Mr. Card says. ``In every industrialized country in the world, imported vehicles account for between 25 and 50 percent of the market - except Japan where all imports share an anemic 3 percent of the market,'' Card says.

Fair trade in auto parts is even more important than increasing US vehicle exports, says Alan Tonelson, research director of the Economic Strategy Institute in Washington. In 1992, parts exports worldwide totalled $28.5 billion; vehicle exports were $18.8 billion.

Japanese automakers have verbally committed to increasing local sourcing of parts and labor at transplant operations to 75 percent. Japanese reluctance to buy many US-manufactured parts is not an issue of quality, Card says; it is a question of diposition.

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