U.s And Japan Car Industries

U.S and Japan Car Industries

It is unfortunate that the U.S. chose to use automobiles as its wedge to open the alleged "closed" markets of Japan. One Japan-based managing executive of the

Big Three has even admitted that they consider the Japanese automobile market to be open. Japan is not the island of protectionism in a sea of free trade that its critic allege. The problem for the U.S. auto-makers is not a lack of market access, but a lack of effort. The first step required for the U.S. auto makers to sell competitively in Japan is not to impose of ridiculous tariffs, but to have Detroit bring up the quality to Japanese standards. All in all, the U.S.'s decision to use automobiles as its wedge to open the Japanese market was surely a dangerous one. In addition, the utilization of unilateral actions by the U.S. is clearly a violation of international trade law. Not only is this decision a resemblance of managed trade but a policy which will weaken the leadership position of the U.S. in the world economy as well.

The U.S. needs to do what the Japanese did when they penetrated the American market; hard market research and heavy investment. The Japanese spent billions of dollars studying American taste and manufacturing models that suited them.

The Big Three have generally confined their efforts to sending models that they have made specifically for Americans. Bill Duncan, the head of the Japan

Automobile Manufacturers Assn. states that "it was the basic principals of competition that made the Japanese automobile industry strong."

One example which reflects the short-sightedness of the Big Three is the insufficient number of right-hand models available in Japan. Since cars in Japan are driven on the left side, all domestic makers produce right-hand drives. It's simple, the inconvenience of a left-hand drive, at tolls, parking lots or when overtaking another car is too dangerous. Naturally when the Japanese export their cars to the U.S., in each of the 190 versions sold, they provide American drivers with a steering wheel where they expect it; on the left side1. On the other hand U.S. exports have a grand total of 2 models which feature a right- hand drive. The Big Three sold a measly 22,000 left-hand models in 1994. Jeep sold 11,000 on their Cherokees alone, just because they remodeled it to a right- hand model2.

Another area in which Detroit must seek change is in car size. In Japan, the normal American cars are just too big. 80% of the cars in Japan are under 2000cc

(2L.) Imagine yourself driving on the jammed packed, narrow streets of Tokyo.