The U.S. Car Allowance Rebate System (a.k.a. 'cash-for-clunkers') program was a short-term boon for automakers participating in our market. Sales went up, inventory went down and nearly 700,000 vehicles that would likely have otherwise ended up on used car lots were destroyed. And since the U.S. is essentially a free market where automakers around the globe are allowed to participate, Japanese and European automakers benefited from the program as well. In fact, Japanese automakers fared even better than their U.S. competitors, as Toyota, Honda and Nissan are said to have surpassed their market share with the program. A reported 319,000 of the 677,000 vehicles sold via cash-for-clunkers were from Japanese companies. But while the U.S. C4C program took place in a free market where everybody is able to participate, critics are complaining that the new Japanese program is anything but equal opportunity.
Japan is considered by many to be the world's most insular auto market, and its $3.7 billion government clunker program makes U.S. autos ineligible for government assistance. According to The Detroit News, the program, which the Japanese government is using to spur sales (which are down 17 percent versus 2008 levels), provides cash rebates of up to $2,830 for customers who turn in vehicles 13 years or older. Car buyers who don't turn in a vehicle can still get over $1,100 toward the purchase of a new vehicle. An estimated 87 percent of all Japanese vehicles are eligible for the program, while zero vehicles from General Motors, Ford and Chrysler will be eligible.
The DetNews is reporting that Motown automakers have written a letter to the Deputy U.S. Trade Representative calling for action on a matter that was called "another example of Japan continuing efforts to discriminate against imported vehicles." Carol Guthry of the U.S. Trade Representative told the newspaper that the government is working to resolve the issue, adding "our position remains that changes are necessary to give U.S. vehicles greater opportunity to qualify under Japan's program."
While we're not exactly import/export experts and we don't have any experience with foreign relations, we're thinking it's about time Japan treated foreign automakers in the Land of the Rising Sun with the same level of equality that its automakers receive elsewhere in the world. What do you think?
