June 30, 1995 in Nation/World

Big Three Expect Pact To Pay Off U.S. Automakers Predict Sharp Increase In Exports To Japan

Associated Press
 

U.S. officials say they expect the new trade agreement with Japan to help the Big Three automakers increase exports to Japan by a factor of six and add 1,000 dealers there by the end of the decade.

But that forecast is not a commitment from Japan or part of Wednesday’s agreement on opening Japanese markets to U.S. cars and parts. It is a goal set by General Motors, Chrysler and Ford.

“It’s not a negotiated number,” an executive at one of the companies said Thursday, speaking on condition of anonymity. “The government said ‘What do you guys want? What (sales level) do you want to get to?”’

To sell 300,000 American-made cars and trucks a year in Japan by 2000, the companies are gearing up to build new right-hand-drive vehicles, investing in Japanese distribution networks and trying to persuade dealers of Toyotas, Nissans and other competitors to start selling Chevys, Jeeps, Mustangs and the like.

Japanese automakers have said for years that U.S. companies sold few cars in Japan because the cars they tried to sell did not suit Japan’s crowded, narrow roads or the tastes of its car buyers. Japanese motorists prefer cars that are smaller, more fuel-efficient and built to higher quality standards than U.S. vehicles, the argument goes.

Besides, the Japanese drive on the left, as in Britain, so they want cars with steering wheels on the right. Only two U.S.-built, right-hand-drive vehicles are now sold in Japan: Chrysler’s Jeep Cherokee and Ford’s Probe.

But that soon will change.

GM will build 20,000 right-hand-drive Chevrolet Cavaliers next year to be sold as Toyotas by the No. 1 Japanese automaker. A right-hand-drive Saturn also will shipped to Japan, probably next year.

Ford will add a right-drive Taurus in 1996 and an Explorer sport-utility vehicle by early 1997. And Chrysler will export right-drive Neon and Jeep Grand Cherokee models next year and minivans in 1997.

U.S. automakers have been reluctant to spend the hundreds of millions of dollars required to engineer and build separate right-hand-drive models for Japan because Japanese dealers, owned or heavily influenced by Japanese automakers, have not been open to selling American cars.

Under Wednesday’s agreement, the Japanese government will send letters to dealers assuring them that they are free to sell American cars and that pressure from Japanese automakers not to do so might violate anti-monopoly laws.

“It seems to be a commitment that offers us a lot of opportunity,” Ford spokesman Ken Brown said.

© Copyright 1995 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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