Whether you deal in Japanese luxury cars, own one or aspire to, this is a troubling time.
Responding to concerns about the ability of U.S.-based manufacturers to compete in Japan, The Clinton administration has threatened to raise the tariff on Japanese luxury cars to 100 percent from the current rate of about 2.5 percent. That means the Infiniti Q45 could go from a list price of about $55,000 to more than $100,000. Ditto for the Lexus LS400. The Acura Legend would cost slightly less at about $90,000. It’s certain that if this trade battle isn’t defused, buyers of luxury cars will face a very different landscape this summer.
The issues that brought on this brinkmanship are complex.
The Big Three in Detroit want to sell more cars in Japan; U.S. parts suppliers want to be able to bid competitively for Japanese contracts; the Japanese want to be able to call their own shots at home; and Toyota, Nissan and Honda wonder why it isn’t sufficient that more than 70 percent of the cars they sell in the U.S. are built in U.S. factories by U.S. workers.
But for car buyers and enthusiasts, one of the biggest questions is, What’s all this going to do to my car-buying choices?
It could limit them dramatically.
For a look at what motoring life could be without Acura, Lexus and Infiniti, turn back the calendar to 1985, when there were no Japanese upscale imports. Honda, Toyota and Nissan were content to be kicking the tailpipes of the Big Three in the economy and family car arenas.
If you wanted a luxury car, there were only a few choices. If you bought American, that meant Lincoln and Cadillac. To go foreign usually meant Mercedes-Benz and the poster car for young entrepreneurs, BMW. The really adventuresome bought Jaguars or Audis.
For some reason, in 1985 Detroit-though concerned about the inroads being made by European luxury sedans-was not screaming about needing a level playing field on the eastern front.
Never mind that a $35,000 Cadillac could cost more than $50,000 in Germany or Great Britain, once all the taxes were levied and government modifications made. Ford and General Motors didn’t have to worry because they had subsidiaries building and selling cars in Europe, an interesting parallel to the plants that the Japanese have built here.
Despite the European influences, Ford and GM (Chrysler, just back from the brink of bankruptcy, was not a high-end player) were confident they could continue to dominate the U.S. luxury car market. So they went on building Lincolns and Cadillacs, without a lot of concern about whether there would be buyers.
Remember the cars from the early 1980s? The Cadillac Cimmaron. The 4-6-8 Cadillac V-8. The Lincoln Town Car with the crushed velvet seats. The Lincoln Mark VI with the opera windows.
The Cimmaron was an abysmal car, and Cadillac had to settle with thousands of unhappy owners of cars with the 4-6-8 V-8. And try to find a Mark VI that hasn’t gone to rust by now.
Then the Acura Legend arrived in 1986, setting a new standard for luxury cars when it came to fit, finish, performance and value. It was an instant hit, and Detroit’s worries deepened.
Lexus and Infiniti arrived in 1989 and again raised the standards more than a few notches, causing sleepless nights not only for executives in Detroit, but for automakers in Germany.
To fight back, Detroit took what would have seemed to be a plainly logical step; they began to build better luxury cars. Cadillac refined the Seville; Lincoln improved the Continental. To match what the Japanese were offering, Cadillac and Lincoln developed multivalve V-8s that delivered more power and burned less fuel than their old two-valve V-8s. And overall construction quality improved.
Sales began to rise again-without 100 percent tariffs on the competitors. Today, cars from Detroit are arguably as good or better in some respects than their Japanese counterparts.
What if there had been no Acura, Lexus or Infiniti?
Detroit executives will tell you that improvement in their products was inevitable, that they would have invested billions of dollars even if they hadn’t been losing sales to the Japanese.
That’s debatable.
A more logical argument is that today’s luxury car buyers are getting better cars for their money-be they from Detroit, Japan or Europe-because of the competition posed by Acura, Lexus and Infiniti.
