The prospect of new voluntary quotas on Japanese auto exports to the United States drew criticism yesterday from virtually every corner of the American auto industry.
The reports in Nihon Keizai Shimbun and Asahi Shimbun, two of Japan's most influential dailies, said the Japanese government will permit a 25 percent increase in auto shipments to this country for the fiscal year beginning April 1.
That would allow Japanese auto makers to pump up to 2.3 million cars into the U.S. market, compared with an official ceiling of 1.85 million units in the previous year.
The increase of 450,000 cars would would render the quota system meaningless, while doing nothing to encourage free trade, lower consumer prices or protect American jobs, according to those on both sides of the quotas debate.
Chrysler Corp. officials, the most vociferous supporters of quotas, said Japan's plan to ship 25 percent more autos would cost U.S. jobs and add about $5 billion to the U.S. trade deficit. But, paradoxically, Chrysler officials complained privately that Japan's decision to keep a ceiling in place will limit the number of small cars that they hoped to get from their Japanese partner, Mitsubishi Motors Corp.
Chrysler brought in 91,718 cars from Mitsubishi in 1984, but says it wants another 200,000 cars annually from Mitsubishi, beginning in the 1986-model year. "But most of the new cars probably will go to Toyota Motor Corp. and Nissan Motor Corp. We're not going to get anywhere near 200,000," one Chrysler official said yesterday.
"The 2.3-million level is designed to make everybody mad. It represents a total misreading of American attitudes toward trade," said Robert E. McElwaine, president of the Washington-based American International Automobile Dealers Association, which represents 7,000 foreign-car dealerships in this country.
AIADA has fought the quotas since their imposition on April 1, 1981. Raising the ceiling by 450,000 cars essentially amounts to no restraints because Japanese auto makers "already were operating at about 90 percent of capacity" in 1984, McElwaine said. "They can't ship much more than 2.3 million cars to this country," he said.
But officially maintaining a ceiling on exports as a trade policy contributes to a product-shortage mentality that allows car prices to stay high in the United States, McElwaine and others said yesterday.
Under the quota system, Japan's Ministry of International Trade and Industry allocates auto exports to this country based on each Japanese auto makers' performance in the U.S. market in the previous year.
That means that Japan's largest car companies, Toyota, Nissan, Honda Motor Corp. Ltd., and Mazda Motor Corp., get the lion's share of MITI's allocations. The problem is that all four companies have been shipping increasingly expensive cars to take advantage of high consumer demand in the U.S. market, industry analysts say.
Toyota sold 557,979 cars in this country in 1984 and Nissan sold 485,298.
Meanwhile, companies like Japan's Isuzu Motors Ltd. and Suzuki Motor Co. Ltd., which offer less costly models, operate under severe export restrictions. Combined U.S. sales of Isuzu and Suzuki -- both of which are sold by General Motors Corp. in the United States -- were less than 35,000- units last year.
Harvey E. Heinbach, an analyst with Merrill Lynch, Pierce, Fenner & Smith Inc., said that Japan has the capacity to ship 2.7 million cars to the United States in 1985-1986. That would give Japanese auto makers a 25 percent share of the U.S. market, compared with 23.48 percent in 1984, Heinbach said. Quota-free exports also would allow smaller Japanese car manufacturers to supply larger volumes of low-cost cars to U.S. buyers, Heinbach said.