Domestic automakers have long complained that the Japanese are free to sell cars in the U.S. market but Americans are virtually shut out of Japan. Worse, they argue, Japanese and U.S. cars are comparably priced in the U.S., but the U.S.-made car costs a fortune in Japan.
Lee Iacocca, Chrysler Corp. chairman, visited the one and only Chrysler dealership in Tokyo during a recent tour and was irate when found the New Yorker Fifth Avenue carried a $31,000 price tag.
”For years the Japanese have been telling us our cars are too big,”
Iacocca said. ”So we come out with our mini-vans that fit the Japanese market. We sold 270,000 in the U.S. last year. We sold two in Japan. And they went for double the price as in the U.S.”
Iacocca also noted that about 2 million Japanese cars were sold in the U.S. in 1984 while Chrysler sold a total of 13,000 cars outside the confines of the U.S.
”We sold 197 cars in Japan last year,” he said. ”If sales rise 100 percent this year, that means we`ll sell 400 cars.”
Burt Bouwkamp, managing director of Japanese operations for Chrysler, in explaining the high cost of U.S.-made cars in Japan, said that for starters the Japanese add a 23 percent commodity tax to U.S. cars with engines of more than 2 liters in displacement (Chrysler`s smallest is 2.2 liters) and 10.5 percent on vans. The cost of shipping is considered value and is taxed, too. There`s also an 18.5 percent tax on air-conditioning components.
Then there`s a 3 percent acquisition tax if the vehicle is to be used for business, 5 percent if a private purchase, and an annual owner`s tax based on engine size that ranges from 29,500 yen ($123) to 148,500 yen ($619). U.S. vehicles typically fall into the 81,500 yen ($340) tax area. Finally, there`s a tax of from 4,400 yen ($18) to 6,300 yen ($23) for every 2,000 pounds the vehicle weighs.
NISSAN ON QUOTAS
Don`t look for any major changes in the types of vehicles Nissan sells here now that Japanese automakers can ship more cars into the U.S., says Teiichi Hara, executive managing director of Nissan`s export operations.
”We don`t think there will be a significant change,” Hara said in an interview in his Tokyo office.
There`s speculation the Japanese will start marketing some cars in the U.S. larger than the current Nissan Maxima or Toyota Cressida. Nissan caused a stir recently when a Cedric was spotted undergoing tests in the U.S. In Japan, Nissan offers the Cedric and Gloria (same car, different engines), and Toyota offers the Crown, about the size of a midsize Chevy Celebrity and as attractive as a brick wall.
”We don`t have plans to introduce luxury cars above the Bluebird (Maxima in the U.S.) yet,” Hara said. ”If we do, we`d need more time to develop them into American models–a year or two, perhaps five.”
In Japan, Nissan also builds the President, its top-of-the-line model, powered by a 4.4-liter V-8, but only 1,500 are built each year.
At the other end of the scale, Nissan builds a 1-liter mini-car called March that`s being sold in Canada under the Micra name. ”We don`t think we`ll bring the March into the U.S. in the very near future,” Hara said.
Hara said the most noticeable change with relaxed import quotas was that Nissan would return to offering a more balanced range of economy, luxury and sports models.
”During the first three years of import restraints, we shifted our strategy to a more profitable mix of cars larger than the (subcompact)
Sentra,” Hara said. ”The ratio of small to big cars shrank. We now will go back more to the cars we had before restraints–more smalls, less bigs.”
As for import prices, Hara said: ”With short supplies of vehicles, it was easy to raise prices. With 450,000 cars added, we should have a good supply of cars, and dealers may not make the same profits they had. Customers will be better off.”
Finally, we asked Hara to respond to claims Japan puts the clamps on selling U.S. cars in his country. It touched a nerve.
”Japan isn`t the problem,” he said. ”It`s the customer who considers a car desirable. In 1958–27 years ago–I started taking engineers to the U.S. to see if Nissan cars could be marketable there. We conducted research for a long time on American tastes. The effort paid off, and now our cars are marketable in the U.S. I question how much effort U.S. automakers made toward meeting Japanese tastes in their cars. I don`t think they`ve made 1/20th the effort we made.”
NOTES
For this they get bonuses? Ford Motor Co., last month announced prices on its 1986 Aerostar van and told dealers they could start taking orders for May delivery. Now, Ford says, it hasn`t even started building the vans and that troubles getting production underway mean they won`t bow until mid-summer. For those counting, that`s the third delay for the Aerostar, which was
”introduced” in prototype form at the Chicago Auto Show the last two consecutive years. Aerostar soon will be around longer in prototype than the Edsel was in production form.
Ford says that when the rear-drive Aerostar does appear it will be offered in cargo and passenger version. Based on dismal sales of the cargo versions of Chevy`s Astro and Toyota`s mini-van, Ford might be wise to go stronger in passenger models. The latest delay puts more than two years behind Chrysler and Toyota and about half a year behind General Motors in the mini-van race. Ford should beat American Motors to market with a mini-van, however, since AMC dropped plans to import Renault`s Espace mini-van to the U.S. for
`86.
Adding to Ford`s troubles was the fact it also announced prices on its new restyled subcompact Ford Escort and Mercury Lynx for `85 1/2 and told dealers to go ahead and take orders for May delivery. Within hours, Ford recalled the cars to inspect for throttles that could stick nearly wide open. Finally, with GM and Toyota building cars together, and Chrysler and Mitsubishi about to, now comes word that Ford is talking with a European outfit–Fiat–about a similar venture.
The good news from Ford is that speculation is building that it will bring out an exotic two-seater sports car in 1988 to compete with GM and Chrysler, with France mentioned as a source.
A reader spotted the limited-edition Honda Accord SEi at a dealership with an optional paint stripe already added for $95. What bugged him most was the $1,500 ”dealer expense” charge added to the sticker.
Awards: For creativity–to the Indiana Chevrolet dealer who added a $40
”intangible tax” on the bill of sale for a Chevy pickup. For simplicity
–to the dealer service writer, who, when told the window trim on the customer`s `83 Olds 98 was falling off, replied: ”You expect cars to last forever?”
Worth noting: Automotive News, a trade publication catering to new-car dealers, reports that a Maryland dealer agreed to make refunds totaling $20,000 to customers as the result of a settlement with the Montgomery County Office of Consumer Affairs. The dealer added a ”mechanical and appearance labor” charge to the selling price of his cars. The county office of consumer affairs claimed the charge simply was added dealer profit and therefore misrepresentation and a violation of the state`s consumer protection act.
A reader said he took advantage of a $14.95 oil change and lube special and instead got taken advantage of himself. He paid $14.95 for the oil change and lube, all right, but $12.60 labor for the lube and $5 for the mechanic to take off the old filter, plus $1.50 for shop supplies for a $32.60 bill on a $14.95 special. Always ask ahead of time what is included in the special. When ”plus labor” is mentioned, find out what the cost will be.
Chrysler plans a 2.5-liter version of its 2.2-liter, 4-cylinder engine in selected cars in `86. The 3-liter V-6 from Mitsubishi arrives in 1987. The joint-venture car to be built by Mitsubishi and Chrysler in the U.S. first will be offered in two-door sport coupe version similar to the current subcompact Dodge Charger and Plymouth Turismo. A four-door sedan like the Omni-Horizon would come later. Price will be about $8,000.
GM said it would build a $750 milllion assembly plant in Kansas City, Kan., to produce front-wheel-drive W-body cars for the 1988 model year. Reportedly, GM could have from three to seven W-body car plants in the near future. The midsize W-body, built on a 107-inch wheelbase, up from 105 inches on a current Celebrity, will bring together the rear-drive G-body Pontiac Grand Prix, Olds Cutlass, and Buick Regal and the front-drive A-body Celebrity, Olds Ciera, Buick Century and Pontiac 6000 into one new line. The Ws will be offered as two-door sport coupes at first, four-door sedans at mid- year `88 and wagons in 1989. The base engine will be a 2.2-liter 4- cylinder, with an enlarged version of Chevy`s current 2-liter, 4-cylinder optional. With a five-speed manual transmission, fuel economy should be in the area of 25 m.p.g. city. A 3.3-liter, V-6 will be an optional performance engine, an enlarged version of the current 2.8-liter Chevy V-6.
MAIL BAG
The bumper fell off my `76 Olds Cutlass because the liner had rusted away. I replaced the liner for $200, then heard Olds replaces them free of charge. True?
–R.W., Highland, Ind.
Olds spokesman Phil Workman in Lansing, Mich., said complaints over rusted bumper liners were handled ”on a case-by-case basis” but added that in Snow Belt areas where salt was used on roads, Olds had made liner repairs at no cost to owners on 1976-77 Cutlass models. Contact your dealer first, he said. If he doesn`t know of the program, contact the local zone at 961-6820.
