I would like to ask the American people: ”Which comes first, the chicken or the egg?” The recent visit of President Bush in search of expanded sales of American cars in Japan has raised this age-old question.
Bush`s visit resulted in a plan of action that provides for increases in the access of U.S. auto products to Japanese markets. In order for Japan to meet these voluntary goals, Japanese demand for U.S.-made cars must increase. But this will not happen until the specific needs of the Japanese consumer are addressed.
A fundamental modification to make American cars salable in Japan is that they be right-hand drive vehicles.
Downsizing of both car bodies and engines is also an important requirement. Typical American vehicles are too wide for narrow Japanese streets and minuscule parking spaces.
Japan has very stringent emission control standards that most American-manufactured vehicles do not meet. Further, Japanese consumers look for fuel efficiency in the vehicles they purchase. And all these vehicle modifications for the Japanese market must be coupled with competitive prices. U.S.-made automobiles are viewed by Japanese consumers as being susceptible to breakdown. The popularity of Japanese and European cars in the U.S. is evidence of this belief also being widespread in the United States.
With respect to auto parts, quality, availability, uniformity and punctual delivery must be guaranteed before Japan can meet its importation goals. Just one inferior quality or missing automotive part will bring an entire production line to a halt.
It is important for Americans to realize that Japan imposes no tariffs on imported vehicles. Thousands of European-manufactured automobiles are imported into Japan annually. In each year since 1988, BMW, Volkswagen and Mercedes-Benz have each sold more than 30,000 vehicles in Japan. In 1985, fewer than 10,000 Mercedes were sold in Japan. The European automobile industry has successfully increased the sales of their cars in Japan through strong marketing, responsive design, fine engineering and the development of their own channels of distribution and repair service.
The global partnership envisioned by the action plan will not occur until the U.S. addresses its own economic shortcomings. The American auto industry must become more globally oriented, like its Japanese and European
counterparts. Until this happens, Japanese market access will not mean expanded sales of U.S. cars or expanded procurement of U.S.-made auto parts in Japan, for it is the individual Japanese automobile purchaser who will ultimately decide whether to buy an American vehicle.
Many Japanese recognize very well the expanding size of the U.S.-Japan trade imbalance. We want very much to cooperate on this issue with the American people. But based upon the above-outlined theory, please consider which should come first, the chicken or the egg.
