By on December 10, 2009

To qualify for Japan’s cash-for-clunker program, new vehicles must meet the 2010 fuel economy standard of 35.5 mpg, making 87 percent of Japanese-made vehicles on sale in their home market eligible for the credit of up to $2,800. In fact, the Japanese program doesn’t even require a clunker (MY 1996 or older) to trade in, although without giving up an inefficient vehicle, the best credit available is a mere $1,132. But the American Automotive Policy Council calls these rules “unfair,” telling the Freep:

We urge the U.S. government to make clear that it cannot tolerate this outright discrimination, particularly at a time when it has provided substantial direct financial support for Japanese automakers in this market

Huh? Is the AAPC talking about America’s cash-for-clunker program, which (like Japan’s) sent Honda and Toyota sales soaring? Or the $1.6b DOE “ATVML” loans that Nissan got, which were dwarfed by the same program’s generosity towards Ford? Or perhaps the $82b+ TARP bailout that… oh wait, that all went to Detroit. Ok, let’s forget about America’s “substantial direct financial support for Japanese automakers” for a second and figure out just how unfair this Japanese program is.

The problem, in a nutshell, is that American automakers have sold a combined 7,901 vehicles in Japan this year. Because those numbers are so low, the Detroit firms are allowed to import vehicles under a program where their fuel efficiency does not have to be rated by the Japanese government. Because it doesn’t have official efficiency data on the low-volume models that use this program, the Japanese government has made them ineligible for the program. If we’re not mistaken though, this importation program isn’t mandated by the Japanese government, but automakers choose to use it anyway. Presumably, if Detroit had any models that could really compete in a 35.5 mpg market, they’d import them through normal channels. But with fewer than 8k units sold YTD, the Japanese market can’t possibly worth the trouble, which explains why the shrilly irrelevant AAPC was put on the case.

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14 Comments on “Detroit: Japan’s Cash-For-Clunker Program Unfair...”


  • avatar

    Many years ago, possibly as far back as the late ’80s, tehre was an ad for Buick that was similar in having the japanese characters upset that buick was beating them. Somehow, this Japanese motif is always very funny to me, although the buick ad was much funnier than this one.

  • avatar
    Omoikane

    The nerve these US government sponsored entities have to complain about the Japanese program is quite amazing.  The US and Canadian government pumped tens of billions dollars into them- money the taxpayer will never see back- and they have the audacity to talk about “discrimination”. It boggles the mind…

  • avatar
    Potemkin

    Nothing new here.   The Japs prove once more why they are eating Detroits lunch.   They got around all the mumbo-jumbo of trade restrictions and benefited their domestic industry.   The idiots in  Washington also benefited the Japs with their ill concieved poorly thought out plan to help Detroit.

  • avatar
    cwallace

    In a way, the bailouts did provide “substantial direct financial support for Japanese automakers” as far as I’m concerned– the program ensures that I’ll never entertain the thought of buying a Chrysler or GM product to replace the two Hondas we currently drive. 

    • 0 avatar
      Steven02

      Actually, you are correct, the Detroit bailout did help the Japanese makers more than you would think.  If GM went under, many of the suppliers it has would have went under as well.  GM uses many of the same suppliers here in the US as Toyota and Honda.  If those suppliers go under, it hurts Toyota and Honda, or Toyota and Honda would have had to prop them up.  If not, fewer cars from Toyota and Honda would have been made here.  So, pick your poison.  While Toyota and Honda would love for GM to go bankrupt, they want it to be a slow process of declining market share and contraction that makes GM a smaller player first.  GMs failure would have hurt Toyota and Honda significantly in the short term.

  • avatar
    dwford

    If the Detroit automakers would hurry up and integrate the US into their world wide operations and sell like vehicles all over the world, they would have US built vehicles that they couls successfully export (it’s not ALL about import restrictions, after all).

  • avatar
    Daanii2

    The Japanese carmakers, and now the Koreans, put in years of effort and billions of dollars of investment to build their sales in the United States. No one gave them anything.

    I lived and worked in Japan for 9 years. I could never figure out why the American carmakers made almost no effort to sell cars in Japan. Compared, for example, to Daimler. It was, and is, like they expect to be given something.

  • avatar
    fincar1

    “If the Detroit automakers would hurry up and integrate the US into their world wide operations and sell like vehicles all over the world, they would have US built vehicles that they couls successfully export (it’s not ALL about import restrictions, after all).”
    Well, there is the small matter of US federal government requirements that are different from those in the rest of the world.

  • avatar
    gslippy

    The only party that Japan’s CFC program is unfair to is the Japanese taxpayers.

  • avatar
    Canucknucklehead

    I also lived in Japan for several years. I can’t think of a single American car that a Japanese buyer would want to drive.

  • avatar
    charly

    Hummer H1, for the ” yes, i’m an asshole” look
     
    PS. went on holiday to Japan this fall. Outside of the Japanse names there were plenty of Volvo’s, Peugeot and VW (and obvious Audi, bmw and Mercedes) and in total 3 Ford’s(trucks) and 2 Hummer’s.  Anecdotal that would leek to a 40% marketshare for Hummer. so i can understand why the American car companies find it “unfair”

  • avatar
    fakeis

    Good reporting. Finally someone to cut thru the media hype.

    I’d like to add another thing too. You can’t sell any car in any country IF THE STEERING WHEEL IS LOCATED AT THE WRONG SIDE!!!

    European makes do excellently well in Japan because they send what they sell in the UK to Japan. They also adjust cars to pass Japanese safety and emissions regulations too. Did the US Big3 do so? No. Sure, they were’nt offered an open car market by the Japanese up until the 1980s, but no developing country in the early 1980s offered free open car markets anyway. Wait till you hear about the import tariffs for cars that Russia and China have even now.

    Talking about tariffs, import tariffs for cars/trucks (I’m going to skip details and give the general idea) are as follows.

    Japan: car 0%, truck 0%
    EU: car 10%, commercial vehicle/trucks 25%
    US: car 2.5%, truck 25%

    That’s why we don’t see Toyota trucks made in Thailand (Hilux and Kijang) nor the various EU commercial vans in the US. We gotta be careful when we tell who’s keeping the markets open these days.

    But the most hilarious thing is how the Japanese Ministry for Transportation quickly made an exception to allow US “grey import” cars to be awarded their cash for clunkers program. Weak. Very Weak. Their spineless action (or willingness to favor the US) may be something we should utilize more often.


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