TOKYO, JAN. 27 -- Japan soon will tell the United States that it will continue voluntary restraint on car exports to the United States for another year starting April 1, Kyodo News Service reported today.
The decision will be made this week by Hajime Tamura, minister of international trade and industry, and it will be relayed to the U.S. government, possibly as early as next week, the news service said.
The 2.3 million-unit limit on Japanese car shipments to the United States will be retained, the report said.
A spokesman for the ministry denied the report and said, "The issue is still under review and no decision has been made."
Most Japanese car manufacturers call for abolition of the voluntary restrictions on grounds that sales of Japanese cars on the U.S. market have declined because of the sharp appreciation of the Japanese yen against the dollar.
The strong yen has forced Japanese auto makers to raise prices of their vehicles several times and has made Japanese cars sold in the United States less competitive.
Automobile industry sources said Japanese car makers would not be able to fulfill their quotas for the year, ending next March 31.
The Japan Automobile Manufacturers' Association said this week Japan's overall car exports in 1987 are estimated at 6.3 million units, down 4.5 percent from 1986.
The sluggish sales overseas intensified competition on the domestic market, where sales gained 5.4 percent to a record 6,018,399 units, the association said.
Japanese car makers have been calling for abolition of the quota system because of slow sales in the United States.
"The market environment has changed because of the yen's appreciation, and we no longer can sell as many cars in the United States as in the past," said Takashi Ishihara, chairman of Japan's No. 2 auto maker, Nissan Motor Co.
But the report said the Ministry of International Trade and Industry is concerned that termination of the quota system could rekindle an export drive by Japanese carmakers and renew trade friction with the U.S. auto industry.
United Auto Workers President Owen Bieber sent a letter to Tamura last month asking Japan to limit its car shipments to the United States to 1.7 million a year, starting April 1.
"Conditions in the U.S. industry warrant a reduction in Japan's voluntary restraint," Bieber was quoted as saying. "It will require a commitment on the part of your government to adopt a meaningful restraint program."
Japan imposed a three-year self restraint in 1981 to help the U.S. auto industry recover from a slump. It has extended the measure annually since 1984 in response to U.S. requests.