The Truth About Cars » AAPC The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 14:03:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » AAPC A Game Of Chicken Tax: Detroit Drops Pretenses, Wants To Keep Japan Out For As Long As Possible Sun, 07 Jul 2013 12:47:11 +0000

Detroit is finally dropping the mask and says what it really wants in U.S. / Japanese trade relations. It wants to keep existing barriers that frustrate importation of Japanese cars, and that, for all intents and purposes, prevent importation of  Japanese trucks. For the next generation, Detroit wants to be in your pocket without outside interference.

Japan is formally joining negotiations on the proposed Trans-Pacific Partnership (TPP) agreement next month in Malaysia. Despite, or possibly because of shrill rhetoric based on lies and deception, Detroit could not prevent it.

Last week, a U.S. government panel led by the Trade Representative’s Office held a hearing to get advice on negotiating objectives for Japan.

“Now that Japan is part of the negotiations,” wrote Reuters,  the American Automotive Policy Council, a lobbying group representing GM, Ford, and Chrysler, “is trying to hold on to the current 2.5 percent tariff on Japanese cars and the 25 percent tariff on Japanese trucks for as long as it can.”  The unions joined the pleas to keep trade barriers against Japanese imports in place. “Thea Lee, deputy chief of staff for the AFL-CIO labor federation, said eliminating the 2.5 percent duty on Japanese cars would gut the Detroit automakers’ profit margins, especially for small- to medium-sized cars.” Reuters says. “Getting rid of the 25 percent truck tariff would eliminate the incentive for Japanese companies to build trucks in the United States, putting U.S. jobs at risk.”

According to Reuters, “Japan already agreed in principle that the phase-out period for U.S. auto tariffs would be the same as the longest phase-out for any other product in the pact.” The longest phase-out would be the pact with for South Korea, which eliminates the 2.5 percent U.S. car tariff after four years and the 25 percent U.S. truck tariff after 10 years.

Detroit and the unions finally drop the charade that all they are interested in is an opening of the allegedly closed Japanese car market, which has been wide open.  The 25 percent chicken tax, along with skewed CAFE rules created a protected market for overpriced trucks that are safe from foreign competition. Detroit wants it to be protected for as long as possible, and the price to be paid by the American truck buyer.

In its representations to the panel, the AAPC still reiterated that Japan “maintains the most closed auto market in the developed world,”  but nobody except Detroit and the unions believe the tired lies anymore. Hard pressed to name the non-tariff barriers it blamed for the low sales of American cars, the AAPC lamely demands that Japan adopts more UNECE rules, while the U.S. does not adopt any.

In contrast, the Japanese Auto Manufacturer Association JAMA delivered short and very polite comments:

“At times during the Japan TPP debate in the U.S., misunderstandings have led to statements that Japan’s market is closed to imports.  In fact, Japan has zero auto tariffs and no restrictive customs or regulations only apply to imported vehicles.  With regard to dealerships, there is no restriction on the brands or vehicles dealers in Japan can sell and Japanese automakers cannot intervene in these dealer decisions.

In the case of the Japanese market, it is essential to note that Japanese consumers overwhelmingly prefer very small cars, which U.S.-based automakers rarely provide.  In 2012, smaller passenger cars, those with up to 2,000cc in engine capacity, had a 90 percent market share in Japan.  However, the U.S.-based automakers offered only five models in this segment while European automakers offered 87 models.  Accordingly, European car sales and market shares have been rising.  These realities confirm that a critical factor to success in any auto market is to offer sufficient choices of models that appeal to local consumers.”


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The Return Of Japan Bashing: Ornery Lobbyist Group Steps Up Anti-Japanese Rhetoric Wed, 22 Aug 2012 20:09:42 +0000

The American Automotive Policy Council does not want Japan to be part of a free trade pact with America and other countries. The lobbying arm of Chrysler, Ford and GM published a study that claims that “including Japan in the Trans-Pacific Partnership (TPP) free trade agreement combined with allowing Japan to continue to manipulate its currency could put 90,000 American auto jobs at risk.”

Matt Blunt, president of the American Automotive Policy Council, told Reuters:

“We firmly believe a free trade agreement with Japan will lock in one-sided trade benefits that Japan enjoys today at the expense of U.S. auto jobs. It will deliver a blow to America’s auto industry and auto workers at really at critical juncture in our recovery.”

Bill Duncan, head of the Washington office of the Japanese Automobile Manufacturers Association’s is shaking his head: “Something is clearly either wrong or incomplete here. Japanese makers produce 70 percent of their U.S. sales in North America, the bulk of which are in U.S. plants with U.S. workers.”

Insulting the American public while assuming that it is stupid enough to believe it, the American Automotive Policy Council is still selling the old canard of a closed Japanese car market which the poor American automakers are just dying to penetrate if the heinous Japanese government would only let them.

The AAPC banks on the illiteracy of Americans when it comes to foreign currencies. The AAPC has the gall to claim that Japan uses “currency manipulation to gain an unfair competitive advantage” while the Japanese yen is at unsustainable levels that drive Japanese auto manufacturers out of their own country.

The AAPC keeps repeating that the Japanese car market is closed, but it can’t come up with proof. Japan has a zero percent duty on automobiles. America charges 2.5 percent on cars and a massive 25 percent duty on light trucks. The AAPC cites the “non-tariff barriers” that supposedly surround Japan, but it is unable to name them. In despair, the AAPC points at the low numbers of American exports to Japan, which indeed are a disgrace.

January through July 2012, foreign manufacturers imported 135,634 vehicles to Japan, up 24 percent from the same period of 2011. Volkswagen, Mercedes, BMW, Audi all registered double digit increases. Volkswagen imported 33,414 units in the period while Blunt’s paymaster Ford only managed to sell 2,185 and was outsold by niche-players such as Porsche and Alfa Romeo. Chevrolet did even worse with just 844 units sold.  In typical “it is not our fault” fashion, Detroit blames its inability or unwillingness to sell cars in Japan on “non-tariff barriers that maintain a closed auto market.”

If you truly want to sell to Japan, you need to have what Japan wants. All of the Detroit Three had ample time to learn this. They all had the inside track when it came to Japan. Chrysler had an alliance with Mitsubishi. GM at one time had control of Isuzu.  Ford had been Mazda’s largest shareholder for many years and controlled the company. They all pulled out for various reasons.

While Detroit and their Washington mouthpiece are blowing smoke, Japan is rolling its eyes. The most formidable barrier keeping Japanese imports out of the U.S. is the obscenely high yen. When Blunt alleges currency manipulation, he leaves only two options: Either he is stupid, or he thinks everybody else is. The 2.5 percent import duty on cars are peanuts in comparison. Nobody is thinking of importing pickups to the U.S., the big Japanese players all have their truck production in the country already.  If you ask Japanese auto executives about the aim of the shrill anti-TPP rhetoric and the desperate lies of the  AAPC, they shrug their shoulders.

One executive told me: “I think they simply want to be ornery.”


Auto Imports To Japan January-July 2012
Cumulative Total January-July
2012 Share% 2011 YoY
VW 33,414 19.0% 27,344 22.2%
Nissan 29,001 16.5% 32,303 -10.2%
Mercedes-Benz 22,314 12.7% 17,527 27.3%
BMW 21,901 12.5% 17,350 26.2%
Audi 13,716 7.8% 11,786 16.4%
Toyota 10,306 5.9% 7,627 35.1%
BMW MINI 9,428 5.4% 7,681 22.7%
Volvo 7,505 4.3% 5,716 31.3%
Peugeot 3,436 2.0% 3,466 -0.9%
Fiat 3,199 1.8% 3,174 0.8%
Alfa Romeo 2,874 1.6% 1,223 135.0%
Jeep 2,774 1.6% 1,708 62.4%
Porsche 2,391 1.4% 1,954 22.4%
Citroen 2,223 1.3% 1,660 33.9%
Ford 2,185 1.2% 1,843 18.6%
Renault 1,904 1.1% 1,687 12.9%
Land Rover 901 0.5% 605 48.9%
Chevrolet 844 0.5% 571 47.8%
Cadillac 755 0.4% 832 -9.3%
smart 718 0.4% 694 3.5%
Dodge 684 0.4% 520 31.5%
Jaguar 613 0.3% 592 3.5%
Suzuki 426 0.2% 2,380 -82.1%
Chrysler 381 0.2% 362 5.2%
Ferrari 275 0.2% 236 16.5%
Maserati 171 0.1% 141 21.3%
Honda 161 0.1% 638 -74.8%
Lotus 155 0.1% 154 0.6%
Hummer 145 0.1% 176 -17.6%
Lamborghini 95 0.1% 55 72.7%
Bentley 93 0.1% 54 72.2%
Aston Martin 83 0.0% 75 10.7%
Lancia 75 0.0% 51 47.1%
Hyundai 65 0.0% 50 30.0%
GMC 62 0.0% 66 -6.1%
BMW Alpina 60 0.0% 82 -26.8%
Rolls Royce 48 0.0% 56 -14.3%
Rover 37 0.0% 24 54.2%
Saab 16 0.0% 38 -57.9%
Mclaren 9 0.0%
Unimog 8 0.0% 4 100.0%
Mitsubishi 7 0.0% 94 -92.6%
Pontiac 7 0.0% 8 -12.5%
Maybach 6 0.0% 7 -14.3%
MG 6 0.0% 6
Morgan 6 0.0% 9 -33.3%
Bugatti 2 0.0%
Ssangyong 2 0.0%
Zagato 2 0.0%
Artega 1 0.0%
Autobianchi 1 0.0% 2 -50.0%
Detomaso 1 0.0% 2 -50.0%
Kia 1 0.0% 2 -50.0%
PROTON 1 0.0%
RUF 1 0.0%
Saturn 1 0.0% 1
Buick 5 -100.0%
GMDAT 1 -100.0%
Mini 1 -100.0%
Opel 1 -100.0%
Others 39 0.0% 37 5.4%
Total 175,535 100.0% 152,681 15.0%
Source:  Japan Automobile Importers Association
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Detroit: Never Mind, Let The Japanese Have Their Kei Cars. We Want Vietnam And Malaysia In The TPP Sat, 04 Feb 2012 19:26:02 +0000

This just in: “The U.S. auto industry has dropped a demand for Japan to abolish rules related to minivehicles ahead of upcoming talks between the two sides over the Trans-Pacific Partnership (TPP) free trade zone,” The Nikkei [sub] writes after reading this story.

Detroit made the generous concession to let Japan have its kei cars ahead of talks between Japan and the U.S., to be held in Washington on Tuesday. 1.52 million kei cars changed hands in Japan in 2011.

The small cars enjoy lower taxes and lower insurance rates in Japan. Previously, the Big Three U.S. automakers found that highly unfair. Rumor has it that after one of the three asked to have the demand dropped, the matter is fair again.

The Nikkei heard that U.S. automakers are worried that opposition against Japan could delay negotiations with other presumptive TPP members. GM wants to expand into fast-growing countries such as Vietnam and Malaysia. These countries are taking part in the TPP talks. A successful deal would make U.S. cars more competitive in these countries.

In the meantime, Japanese are worried about “GM crops.” No relation to the General – the “GM” stands  for Genetically Modified. Allegedly, two thirds of U.S. food already is “Frankenstein food,” Japan’s Majiroxnews says. Fanning these flames would have much better chances for success than denying the Japanese their lower taxed kei cars.


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While American Automakers Want Japan To Abandon Kei Cars, Matt Blunt Won’t Release The Documents, Again Sat, 04 Feb 2012 16:07:26 +0000

For a long time, Japan’s automakers had pressured their government to enter free trade talks with Europe and the U.S. The Japanese government had dragged its heels, putting the interest of ageing farmers first. With a trade agreement, Japan would be a ripe market for American rice farmers and cattle breeders, and I would finally be able to enjoy a good steak in Japan without risking a heart attack. Caused by the price, not by the cholesterol.

After the Japanese car industry did flee the strong yen and the country, its government reluctantly entered negotiations. Not surprisingly, the American car industry is opposed.

When Japan announced its intentions to join the Trans-Pacific Partnership (TPP) negotiations, U.S. car companies represented by the American Automotive Policy Council (AAPC) expressed “adamant opposition,” Inside U.S. Trade reported. The AAPC represents Ford, Chrysler, and GM. Last November, AAPC President Matt Blunt demanded that Japan should not be allowed to join the TPP negotiations until U.S. and other foreign cars have achieved a higher market share in Japan. Which is a crafty way of saying “never.”

Now, the AAPC found another straw man argument. Japan should give up its beloved kei cars. Or rather the preferential tax treatment of the pint sized cars.

“Japan’s ‘Kei’ super-mini car segment has consistently represented over 30 percent of the auto market, but no longer has a clear policy rationale to be provided preferential treatment,” the AAPC wrote in an opinion paper submitted to the U.S. Trade Representative.  Imagine the uproar it would cause if a foreign trade organization would dare to doubt the policy rationale behind preferential treatment of the American pick-up. There is nothing that precludes the importation of foreign kei cars to Japan. If there would be foreign kei cars.

Of course it would be more honest to say: “Look, 2.5 percent import duty on foreign cars brought to the U.S. is low enough, who wants zero like in Japan. We want to keep that tariff. We especially want to keep the 25 percent chicken tax on trucks that worked so well. Exports to Japan? Are you kidding me?” That would be honest, but honesty does not get you far in politics.

Nobody knows that better than the former governor of Missouri Blunt, who did not run for re-election after one term, rocked by scandals. He chose a career in lobbying, which got him the job as AAPC president last year. Blunt riles against non-tariff barriers that unfairly prevent the success of American cars in Japan, but Blunt is hard pressed to name the barriers when asked what they are.

In an interview with Inside U.S. Trade, Blunt said that the AAPC will not develop an exact list of barriers its members face in Japan. Blunt said that would be a “classic whack-a-mole” approach under which the United States would seek to address one barrier only to have another one pop up.

Come on, Matt Blunt. Release the documents.

Meanwhile, the AAPC “is fully supportive of the ambition of a 21st century TPP agreement with Australia, Brunei, Chile, New Zealand, Malaysia, Peru, Singapore and Vietnam.” No wonder, they don’t have much of a car industry.

In the unlikely case that Japan should succeed with that TPP business in an election year, Blunt could always declare an emergency and shoot them.


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