U.S. Trade Representative William E. Brock predicted yesterday that Japan would import 750,000 more cars a year if quotas are lifted, a figure higher than most estimates and one likely to intensify the debate over whether the Reagan administration should allow the current restraints to end March 31.
Brock's statement to the congressional Joint Economic Committee came one day after a Cabinet-level committee recommended that the president leave it up to Japan whether to continue the so-called "Voluntary Restraint Agreement" for a fifth year.
That recommendation was attacked yesterday by union leaders meeting in Bal Harbour, Fla., and by Rep. John Dingell (D-Mich.), who is sponsoring legislation that would tighten Japanese auto import quotas.
However, Brock won support yesterday from the Federal Trade Commission, which issued a report saying that the quotas are costing consumers $1.1 billion a year.
Japanese auto makers currently operate under restraints that officially limit their car exports to the United States to 1.85 million units annually. But the Japanese actually sold 1.96 million passenger cars in this country between December 1983 and November 1984, according to figures compiled by the U.S. International Trade Commission.
The over-quota sales largely were attributable to Japanese cars brought into the United States through Puerto Rico and other third-party territories, the ITC said in its January 1985 report on the domestic auto industry.
If Brock's forecast is correct, the number of Japanese cars shipped here would reach 2.71 million cars within a year. In addition, Honda Motor Co. Ltd. and Nissan Motor Co. Ltd., through their American subsidiaries, collectively have the capacity to produce 270,000 small cars annually on U.S. soil.
Japanese imports accounted for 18.4 percent of the 10.5 million passenger cars sold in this country last year. Total auto imports were 23.4 percent of the U.S. market in 1984.
Sources said that Brock's forecast was the result of conversations with Japanese government officials and auto industry representatives.
Other forecasts, however, have cited lower figures. Members of Japan's ruling Democratic Liberal Party, here for the Reagan inaugural, said the Japanese auto industry could not ship more than 2.5 million cars to the United States, an increase of 650,000 cars over the current official quota.
Ford Motor Co. and Chrysler Corp., two of the most vocal opponents of quota elimination, agree with the lower number suggested by Japanese government officials. And both Ford and Chrysler have vowed to follow the lead of General Motors Corp., which has adopted an "Asian strategy" to bolster its supply of small cars to grab a greater share of entry-level car buyers.
GM opposes the quotas. And once they are lifted, GM plans to import up to 300,000 small cars a year from its Japanese partners, Isuzu Motors Ltd. and Suzuki Motor Co. Ltd. Because of differences in U.S.-Japan production costs, GM can buy those high-quality Japanese models at a per-unit cost that is at least $1,500 less than it would cost to build them in the United States.
Chrysler now imports 87,500 passenger cars a year from Mitsubishi Motors Corp. But Chrysler officials say they will bring in an additional 100,000 cars annually from Mitsubishi if quotas are lifted. "It's the old story. If you can't beat 'em, join 'em," Chrysler Chairman Lee A. Iacocca said in Detroit last week.
Ford currently imports no vehicles from Japan. But the company is planning to build 130,000 cars a year in Hermosillo, Mexico, using many parts from its Japanese partner, Mazda Motor Corp. The Made-in-Mexico Fords, scheduled to roll in 1987, will be shipped to the United States. Ford officials say they will seek other low-cost sources to augment those shipments.
Harvey E. Heinbach, an analyst with New York-based Merrill Lynch, Pierce, Fenner & Smith Inc., said U.S. auto makers simply will accelerate their plans for increasing overseas sourcing of small cars. "These things have been developing for some time" because of market realities, Heinbach said. "They are just doing what they have been planning to do all along."
Those developments could wipe out as many as 110,000 U.S. auto jobs by 1987, according to Dingell, who is chairman of the subcommittee on oversight and investigations of the House Energy and Commerce Committee. Dingell based his remarks on a Commerce Department report on the quotas, which he released yesterday.
"The Commerce Department believes this loss would be largely by attrition. I disagree," Dingell said. "Losses of sales of this magnitude will affect whole production lines and plants, causing production curtailments, plant closure and unemployment."
Union leaders meeting in Bal Harbour agreed with Dingell, but said that the impact of the administration's decision could result in the loss of more than 200,000 jobs.
"It is truly an outrage," said Owen Bieber, president of the United Auto Workers union. He said the proposal "makes even less sense" because American trade negotiators have failed to gain any corresponding agreement from Japanese officials to lift Japan's trade barriers on American goods.