Japan opens clunkers offer to more U.S. cars

[Coventina]

Source: Detroit Free Press

The government of Japan said Tuesday it was opening its cash-for-clunkers program to a wider array of U.S. vehicles, following a month of protests from Detroit automakers.

While the change will not likely boost Japanese sales for U.S. companies, which managed to sell just 8,701 vehicles there in 2009, it does mark a political victory for Detroit automakers on trade.

General Motors, Ford and Chrysler had complained that Japan was unfairly limiting its program to boost sales of fuel-efficient vehicles to models made only within that country. Detroit's automakers use import rules that don't require their fuel economy figures to be certified by the Japanese government, a requirement of Japan's clunkers plan.

In a statement Tuesday, Japan's Ministry of Economy, Trade and Industry said it would allow Detroit automakers to use U.S. fuel economy ratings to qualify under the Japanese program, effective immediately.

Read more: http://www.freep.com/article/20100120/BUSINESS01/1200313/1002/Business/Japan-opens-clunkers-offer-to-more-U.S.-cars

[Art_from_Ark]

1. Detroit should acknowledge the fact that

they don't produce too many cars that are suited for small Japanese roads and stricter regulations. For example, the smallest car actually produced in Detroit has an engine displacement that would put it in or near the top tier of the vehicle tax structure here, not to mention the weight tax that is charged every two years when mandatory inspections are made. Moreover, if the car fails the inspection, then parts have to be ordered, maybe special-ordered, and that can run into big bucks. So there's no real incentive for the average Japanese to get an American car.

[StreetKnowledge]

2. What about cars like the Focus, Cobalt and Caliber?

I know from experience that they are considered fairly small cars even in Europe. I know Japan has its Kei cars, but I can't imagine the small cars from US makers are all that big, even there......

[Art_from_Ark]

3. I am not familiar with those models

I can't remember seeing any of those on Japanese roads (and I do look for American cars), but some or all of them could be manufactured by Japanese companies and marketed in Japan under a different make/model name, much like the Chevy Sprint was made by Suzuki and sold in Japan as the Suzuki Cultus.

I'm not sure how many "4-bangers" are actually made in Detroit anymore, but a 4-banger (up to 2 liters) is considered to be a standard size and is taxed at a rate of about $350 per year (or $400 per year for older cars), plus a weight tax every two years at inspection. Vehicles with larger engines are taxed at a higher rate. Both the weight tax and engine displacement tax are fixed and are not related to the car's actual value.

In contrast, a typical "Kei" (sub-compact) car has an engine displacement of less than 1 liter (650cc in the case of my Kei), and the yearly tax on a "Kei" is from about $45 to $75. Plus, the gas mileage of a Kei (mine does about 41mpg on crappy Japanese roads) is a big plus in a country where gasoline costs about $5/gallon.

[DainBramaged]

4. Of course you're not familiar, bash our vehicles without complete knowledge of models

how typical of DU.

I drive a '4-banger', a 2007 Cobalt SS. Made in the US of A. Before you start to bash American cars, maybe you should do a little research first.


This move by japan is weak and frankly bullshit. They whined long and loud when we initiated our cash for clunkers program, and took 65% of the sales. And since the US has NO manufacturing facilities in Japan, we are forced to import cars dramatically handicapped by the government to meet requirement that japanese cars don't have to meet.


One of these day America will wake up.


Maybe you should visit http://www.uaw.org/uawmade/auto/2010/index.cfm and get a clue.

[Art_from_Ark]

5. Where was I bashing American vehicles?

I said most of them are not suited for Japanese roads. Have you ever been to Japan and tried to drive on Japanese roads, many of which are barely 1 1/2 lanes wide? The average car in the US would be large in Japan. And the big cars are really road hogs here. I was behind a Lincoln Navigator the other day, and that thing was taking up nearly the whole lane, from shoulder line to center line. Perhaps you should educate yourself about the situation in Japan. Let me help:

There are more than 60 million registered vehicles in Japan, or about one vehicle for every two people. The car market is saturated.

There are more than half a dozen domestic auto manufacturers in Japan that are already competing for shares in a saturated market.

Japanese cars are generally reliable, and most owners in Japan trade their vehicles in before they even reach 50,000 miles. That means that there is a used car market as well full of low-mileage vehicles that are also in good running condition (Japanese used car dealers do not sell lemons as a general rule, and used cars even come with warranties). And given the rigorous inspection system here in Japan, there are very, very few actual "klunkers" on the road.

If you need a part for a domestic make, you can get it just about anywhere. If you need a part for a foreign make, you often have to go to a dealer, or even have it special-ordered. And if your foreign car has a breakdown out in the middle of nowhere, good luck in finding someone who can service it.

Your 4-banger Cobalt, which is described as a "sub-compact", would be considered standard size in Japan。Since it has a 2-liter engine, the yearly tax on it would be from $500+, depending on its age. The manufacturer's suggested retail price, stripped down, is $23,000, which is more expensive than a comparable Japanese car. It also weighs nearly 3000 pounds, meaning that the weight tax would also be high (about $200). Plus, it's a two-door, which is not a popular style in Japan.

Here is a Japanese car tax chart for comparison. http://www.eris.ais.ne.jp/~t-kondo/kog/kcost.html

Your Cobalt's class would be 2.0-2.5L (just below the top pink line), with standard gas mileage of 8 kilometers per liter. The taxes and other costs (in yen) from left to right are engine displacement tax; weight tax; mandatory liability insurance fee; optional insurance fee (collision for your vehicle and other people's vehicles; bodily injury to yourself and/or your passengers, etc.); fuel costs; turnpike tolls (average for 1 year; all expressways in Japan are toll roads); inspection fee (once every 2 years); and the two columns to the far right are average operating cost for 1 year, and average operating cost for 3 years. To convert yen into dollars, divide the yen price by 90.

The chart below that shows that it would be, on average, 2.2X as expensive to operate your Cobalt in Japan than it would be to operate a Japanese "Kei" car.

[Art_from_Ark]

6. I saw a GM car on the road today that is suited for Japanese roads

It's called an MW (for "Mini Wagon", I assume). It is Japanese-sized, and the steering wheel is on the correct side for Japan.



And guess what? It's made by Suzuki.