Japanese concern at US car companies

Japan’s largest automobile manufacturer is afraid of backlash in the form of protectionist practices if the fortunes of Ford and General Motors do not improve.

Hiroshi Okuda, the chairman of Toyota, who is also the head of the Japan Business Federation, has said that “nationalistic sentiment” could lead to trade restrictions in an attempt to turn the financial positions of Ford and GM around.

However, both US carmakers said that they were not looking for restrictions that would benefit them at the expense of Japanese manufacturers, as happened in the early 1980s when Japanese carmakers agreed to voluntarily cut imports.

Additionally, the director of International Economics, a think tank in Washington, DC, said that the internationalization of the automobile sector made protectionist policies less likely now than they were in the past and that it was more likely that attention would be paid to the yen-to-dollar exchange rate.

Mr. Okuda, however, does not buy the argument that the fact of Japanese carmakers’ placement of facilities in the US will ward off protectionist policies if the market shares of Ford and GM continue to decrease.

The two US carmakers together had 65 percent of the market in 1982; this market share had fallen to 47 percent by 2004.

Discuss this in the Finance Markets forums

Story link: Japanese concern at US car companies