PRESS: Japanese Govt paid for Toyota Hybrid system

regfootball · March 26, 2008

Premium problem
It hardly seems fair to Detroit to compare its efforts in the hybrid arena to Toyota's. Chrysler's Press says when he was at Toyota, "the Japanese government paid for 100% of the development of the battery and hybrid system that went into the Toyota Prius."

http://www.msnbc.msn.com/id/23793222/page/2/

ah, it comes out

y'all still want to keep humping toyota's leg now?

Edited March 26, 2008 by regfootball

mustang84 · March 26, 2008

So that's why Toyota is raking in so much profit the last few years...must be nice to have things paid for by your own government!

regfootball · March 26, 2008

or even to just have their support!

enzl · March 26, 2008

or even to just have their support!

True dat.

VenSeattle · March 26, 2008

Well, that explains why Toyota was able to sell the Prius at a profit so soon after production began.

the_yellow_dart · March 26, 2008

Why the American government doesn't help any of their manufacturers is beyond me.

A good step would be to take the health care costs from them. It would be step #1 towards a national health care system - nationalize the auto workers health care first, see how that goes, make adjustments. Then after a while, bring it to the public.

VenSeattle · March 26, 2008

Oh... they'll step in to help a failing bank or airline, but...

CARBIZ · March 26, 2008

Y'know, my disagreements with Enzl over the media laziness and 'piling on' center on what I consider to be conspiracies such as this. When I was in University, even a casual investigation (and that was in the pre-internet world!) revealed hundreds of sources where MITI in Japan was guiding and propping up Japanese corporate raiding on North America. The information was easy to find and readily available. The fact that MSNBC throws out this quote from Jim Press so casually, without any real remark, shows how lazy the media is. This should be front page news, especially for the New York Times, which has often gone on the attack against Wagoner and GM. I wonder why the deafening silence?

What Japan Inc has done on these shores over the past 30 years is nothing short of an act of war, IMO. Washington/Ottawa is allied with out lazy media, manipulated by a culture that understands us far more than we bother to understand them, and the recipe is a wholesale hollowing out of our manufacturing/technological base over the past 30 years.

Coupling this with the scandalous cost over-runs and incompetent strategies in Iraq/Afghanistan (incidentally, being paid for with borrowed money by the same people who are hollowing out our manufacturing base!) and the resultant implosion of America's economy, the recipe is ripe for a 'correction' this contintent hasn't seen since 1929.

Torn from the pages of yesterday's National Post, Wall Street has handed out 34,000 pink slips to Wall Street fat cats already, with another 20,000 expected soon, and that doesn't include the Bear Stearns employees, who are expected to add another 7,000 job losses to those numbers. So, the highly vaunted shift from nuts and bolts to paper shuffling that has so enamored us for the past 20 years, glossed over the blue collar job losses and paved the way for a BMW and Mercedes invasion of your two coasts, is now coming to an end.

I have said this before and I will say it again: you cannot eat paper. If that is all America (and Canada) can produce, then we are mortgaging our future - literaly. None of this is recent news, it is just that while 'happy days' were here, nobody has cared to listen. Hell, Lee Iaccoca bitched about the free ride MITI and the Japanese government were giving Toyota and the gang back in the early '80s! But the WSJ and other learned media outlets would prefer to dismiss him than look into his allegations. :banghead:

enzl · March 26, 2008

Y'know, my disagreements with Enzl over the media laziness and 'piling on' center on what I consider to be conspiracies such as this. When I was in University, even a casual investigation (and that was in the pre-internet world!) revealed hundreds of sources where MITI in Japan was guiding and propping up Japanese corporate raiding on North America. The information was easy to find and readily available. The fact that MSNBC throws out this quote from Jim Press so casually, without any real remark, shows how lazy the media is. This should be front page news, especially for the New York Times, which has often gone on the attack against Wagoner and GM. I wonder why the deafening silence?
What Japan Inc has done on these shores over the past 30 years is nothing short of an act of war, IMO. Washington/Ottawa is allied with out lazy media, manipulated by a culture that understands us far more than we bother to understand them, and the recipe is a wholesale hollowing out of our manufacturing/technological base over the past 30 years.

Coupling this with the scandalous cost over-runs and incompetent strategies in Iraq/Afghanistan (incidentally, being paid for with borrowed money by the same people who are hollowing out our manufacturing base!) and the resultant implosion of America's economy, the recipe is ripe for a 'correction' this contintent hasn't seen since 1929.

Torn from the pages of yesterday's National Post, Wall Street has handed out 34,000 pink slips to Wall Street fat cats already, with another 20,000 expected soon, and that doesn't include the Bear Stearns employees, who are expected to add another 7,000 job losses to those numbers. So, the highly vaunted shift from nuts and bolts to paper shuffling that has so enamored us for the past 20 years, glossed over the blue collar job losses and paved the way for a BMW and Mercedes invasion of your two coasts, is now coming to an end.

I have said this before and I will say it again: you cannot eat paper. If that is all America (and Canada) can produce, then we are mortgaging our future - literaly. None of this is recent news, it is just that while 'happy days' were here, nobody has cared to listen. Hell, Lee Iaccoca bitched about the free ride MITI and the Japanese government were giving Toyota and the gang back in the early '80s! But the WSJ and other learned media outlets would prefer to dismiss him than look into his allegations.

To be fair--the US response to MITI behavior was Import Quotas....so Honda started production here...and now the transplants will outproduce the Big 2.8 in a few years--

Otherwise, the governmental incompetence cited is partially to blame-- there were a series of programs the US gov't sponsored to encourage the manufacturers (Ford, GM & Chrysler all produced concepts in conjunction with them.), then they went and built millions of SUV's and large trucks, so go figure.

While there is certainly plenty of blame to go around, the delayed 'globalization' of these 3 companies--and the product inadequacies--are the real problem. Blaming the media or wall street is simply letting them off the hook.These companies had weaknesses that they chose NOT to address---all of the other factors merely created the environment in which the 'sickness' is threatening the patient's life.

As far as the paper-pushing...well, that's been going on for 50+ years. Most of those 'fatcats' losing their jobs are middle-class individuals who work in a high cost city like NY and, depite possibly making 6 figures, are simply surviving economically.The others are their secretaries and support staff---otherwise, it's golden parachutes all around--just like the braintrust at GM!

Edited March 26, 2008 by enzl

FUTURE_OF_GM · March 26, 2008

Y'know, my disagreements with Enzl over the media laziness and 'piling on' center on what I consider to be conspiracies such as this. When I was in University, even a casual investigation (and that was in the pre-internet world!) revealed hundreds of sources where MITI in Japan was guiding and propping up Japanese corporate raiding on North America. The information was easy to find and readily available. The fact that MSNBC throws out this quote from Jim Press so casually, without any real remark, shows how lazy the media is. This should be front page news, especially for the New York Times, which has often gone on the attack against Wagoner and GM. I wonder why the deafening silence?
What Japan Inc has done on these shores over the past 30 years is nothing short of an act of war, IMO. Washington/Ottawa is allied with out lazy media, manipulated by a culture that understands us far more than we bother to understand them, and the recipe is a wholesale hollowing out of our manufacturing/technological base over the past 30 years.

Coupling this with the scandalous cost over-runs and incompetent strategies in Iraq/Afghanistan (incidentally, being paid for with borrowed money by the same people who are hollowing out our manufacturing base!) and the resultant implosion of America's economy, the recipe is ripe for a 'correction' this contintent hasn't seen since 1929.

Torn from the pages of yesterday's National Post, Wall Street has handed out 34,000 pink slips to Wall Street fat cats already, with another 20,000 expected soon, and that doesn't include the Bear Stearns employees, who are expected to add another 7,000 job losses to those numbers. So, the highly vaunted shift from nuts and bolts to paper shuffling that has so enamored us for the past 20 years, glossed over the blue collar job losses and paved the way for a BMW and Mercedes invasion of your two coasts, is now coming to an end.

I have said this before and I will say it again: you cannot eat paper. If that is all America (and Canada) can produce, then we are mortgaging our future - literaly. None of this is recent news, it is just that while 'happy days' were here, nobody has cared to listen. Hell, Lee Iaccoca bitched about the free ride MITI and the Japanese government were giving Toyota and the gang back in the early '80s! But the WSJ and other learned media outlets would prefer to dismiss him than look into his allegations.

:yes:

Spot on!

Just like everything else in this country, the new CAFE regs are designed to hinder Detroit and nothing more. And as usual, whether through fate or careful planning, Detroit will end up getting screwed.

Edited March 26, 2008 by FUTURE_OF_GM

CARBIZ · March 26, 2008

To be fair--the US response to MITI behavior was Import Quotas....so Honda started production here...and now the transplants will outproduce the Big 2.8 in a few years--
Otherwise, the governmental incompetence cited is partially to blame-- there were a series of programs the US gov't sponsored to encourage the manufacturers (Ford, GM & Chrysler all produced concepts in conjunction with them.), then they went and built millions of SUV's and large trucks, so go figure.

While there is certainly plenty of blame to go around, the delayed 'globalization' of these 3 companies--and the product inadequacies--are the real problem. Blaming the media or wall street is simply letting them off the hook.These companies had weaknesses that they chose NOT to address---all of the other factors merely created the environment in which the 'sickness' is threatening the patient's life.

As far as the paper-pushing...well, that's been going on for 50+ years. Most of those 'fatcats' losing their jobs are middle-class individuals who work in a high cost city like NY and, depite possibly making 6 figures, are simply surviving economically.The others are their secretaries and support staff---otherwise, it's golden parachutes all around--just like the braintrust at GM!

It's odd: we both want Detroit to recover but we seem to look at the problem from diametrically opposed poles. Of course Detroit is not faultless! But America's hubris and belief that everybody wants to be like you is finally coming home to roost. Detroit ignored Japan Inc. at its own peril. Washington continues to ignore Japan Inc. at its own peril (and China, for that matter.) When Japan starting dumping (and I use that term literally) its cheap electronics on our shores 50 years ago, nobody cared. The Pengaton only raised its head once when it realized Zenith was about to close up shop, wondering where the future aircraft would get their flatscreens from. When will Washington and the American media finally wake up to the fact that the farm has been sold off, the mortgage is held by someone who does not have your interests at heart, and your children are going to be virtual slaves in the coming decades?

Americans pride themselves on entrepreneurship and capitalism, assuming that it will always win the day. How often do the heads of Ford, Chrysler and GM ever get together? Never. How would that look? The WSJ would scream 'collusion' and 'conspiracy' from the rooftops. However, the heads of Mitsu, Nissan, Toyota and the gang practically lived together throughout the '80s when the assault on North America was being planned. Americans are big on laissez faire; Japan lives and dies by a controlled economy. China is following Japan's lead - and we are giving them our technology on a silver platter. Does Washington think China will be won over by Tupperware and McDonald'? Hell, you guys even finance the protection of Japan for the past 60 years, freeing up Japanese capital to undermine the American economy at every turn.

I don't know. Perhaps we deserve what is coming. Darwin must be spinning in his grave. Perhaps every civilization is destined to rise, become fat, lazy and stupid, then fall. History keeps repeating itself. I thought that maybe, just maybe, our civilization would be smart enough to see this one coming.

It isn't enough that Detroit has had to battle an indifferent Washington, jaded public, lazy media, a growing Japanese manufacturing collossus, but also the might of the Japanese government?

siegen · March 26, 2008

Not surprising.

What is surprising is how much of a pass the media gives it. If the government stepped in and paid for even a portion of the R&D for the Volt, there's a good chance, I reckon, that we wouldn't hear the end of it.

enzl · March 26, 2008

It's odd: we both want Detroit to recover but we seem to look at the problem from diametrically opposed poles. Of course Detroit is not faultless! But America's hubris and belief that everybody wants to be like you is finally coming home to roost. Detroit ignored Japan Inc. at its own peril. Washington continues to ignore Japan Inc. at its own peril (and China, for that matter.) When Japan starting dumping (and I use that term literally) its cheap electronics on our shores 50 years ago, nobody cared. The Pengaton only raised its head once when it realized Zenith was about to close up shop, wondering where the future aircraft would get their flatscreens from. When will Washington and the American media finally wake up to the fact that the farm has been sold off, the mortgage is held by someone who does not have your interests at heart, and your children are going to be virtual slaves in the coming decades?
Americans pride themselves on entrepreneurship and capitalism, assuming that it will always win the day. How often do the heads of Ford, Chrysler and GM ever get together? Never. How would that look? The WSJ would scream 'collusion' and 'conspiracy' from the rooftops. However, the heads of Mitsu, Nissan, Toyota and the gang practically lived together throughout the '80s when the assault on North America was being planned. Americans are big on laissez faire; Japan lives and dies by a controlled economy. China is following Japan's lead - and we are giving them our technology on a silver platter. Does Washington think China will be won over by Tupperware and McDonald'? Hell, you guys even finance the protection of Japan for the past 60 years, freeing up Japanese capital to undermine the American economy at every turn.

I don't know. Perhaps we deserve what is coming. Darwin must be spinning in his grave. Perhaps every civilization is destined to rise, become fat, lazy and stupid, then fall. History keeps repeating itself. I thought that maybe, just maybe, our civilization would be smart enough to see this one coming.

It isn't enough that Detroit has had to battle an indifferent Washington, jaded public, lazy media, a growing Japanese manufacturing collossus, but also the might of the Japanese government?

All that you say is hard to argue with...I just place alot more blame with the people running the Detroit 2.8.

They squandered (literally) a magnificent legacy. Everything else is just contributing factors.

I sincerely hope I'm wrong, but I'm not sure that the proper lessons have been learned--and I don't believe the current leadership at GM is qualified to lift them out of the quagmire.

FAPTurbo · March 26, 2008

What is surprising is how much of a pass the media gives it. If the government stepped in and paid for even a portion of the R&D for the Volt, there's a good chance, I reckon, that we wouldn't hear the end of it.

QFT

March 26, 2008

"It's odd: we both want Detroit to recover but we seem to look at the problem from diametrically opposed poles. Of course Detroit is not faultless!"

These arguments become so protracted that the real issue is often missed. Who's fault is it ultimately that the Japanese do so well in America? Well, the American car-buying public, that's who. If Toyota, Honda et al had no appeal whatsoever, their cars simply wouldn't sell. If they really cared about the woes of the US auto industry and acted upon those concerns, their cars wouldn't sell either.

To be fair, the average American consumer treats a car like a washing machine. They want it to operate reliably. They want it to look smart enough, but don't want anything particularly avantgarde. Most crucially, they want as many features as possible for as little moolah as they can conceivably get away with.

To that end, US companies are having a tougher time, particularly as Americans are increasingly veering towards smaller, more economical machines which generally yield less unit profit for manufacturers. American companies, faced with crippling costs dictated by union contracts and privatised health care, are faced with fewer choices in order to offer viable competition to the Japanese and Koreans: use cheaper materials and fewer standard features but build in the States (making the product less competitive), use cheaper labour (maintaining competitiveness but building in Mexico), hiking the price to compensate (a gun to the head move) or pulling out of the market segment altogether (a death wish). US companies have found some repreive by using foreign models from subsidiaries (eg Aveo, Astra, Focus) in recent years, but since the development and build of each is almost always outside of the US, that does little to help the industry either.

I think if the Volt goes into production in 2010 as indicated, we could see a credible turning point with this vehicle. But the truth is that the Japanese have had the small family car hybrid market to themselves for a decade now, and while other manufacturers fumble around in the US market, they've had the ride of the range.

These arguments, blaming Toyota and Honda for the US industry's woes, are very tiresome. The Big 3 have had their heads in the sand over many issues for a very long time. If you don't tackle the real issue head on, you'll still be blaming others and arguing in circles in a decade's time.

siegen · March 26, 2008

These arguments, blaming Toyota and Honda for the US industry's woes, are very tiresome. The Big 3 have had their heads in the sand over many issues for a very long time. If you don't tackle the real issue head on, you'll still be blaming others and arguing in circles in a decade's time.

Oh come on, we all know Toyota is to blame. :AH-HA_wink:

Honda, on the other hand, is quite an anomaly. Despite being opposed by the Japanese government from the start, and competing against government-backed Toyota since day one in their home market, they have still grown to where they are today; a step ahead of Toyota in technology and the world's largest engine maker with high profit margins. I don't like it when people lump Toyota and Honda together for this very reason, they are two entirely different animals.

But I do agree that it is GM's past choices that are haunting them now, and until they reduce their overhead they will be unable to compete in the small car market. I am confident that GM will get there, perhaps soon. The first step of course will be to stop selling German/Korean/Japanese rebadges, har har. :AH-HA_wink:

Intrepidation · March 26, 2008

I thought Porsche had the highest profit margins?

March 26, 2008

Oh come on, we all know Toyota is to blame. :AH-HA_wink:
Honda, on the other hand, is quite an anomaly. Despite being opposed by the Japanese government from the start, and competing against government-backed Toyota since day one in their home market, they have still grown to where they are today; a step ahead of Toyota in technology and the world's largest engine maker with high profit margins. I don't like it when people lump Toyota and Honda together for this very reason, they are two entirely different animals.

But I do agree that it is GM's past choices that are haunting them now, and until they reduce their overhead they will be unable to compete in the small car market. I am confident that GM will get there, perhaps soon. The first step of course will be to stop selling German/Korean/Japanese rebadges, har har. :AH-HA_wink:

Then you'll still be blaming Toyota in ten years' time. The truth is they've capitalised on the American market in particular for donkey's years now and the US automotive industry has basically let that happen, whether the issue be one of brand perception, or discounting, or even where US manufacturing facilities are located. Toyota have an ability to appeal to a large swathe of American consumers - if they didn't, then the domestic product wouldn't have anything to worry about.

So how do you propose that GM drastically reduce its overhead expenditure and build small cars in the United States? Become non-unionised? Offer little or no benefits-in-kind? Use poorer quality materials? Keep model specs to a minimum? Simply reduce labour rates? Alternatively, do you think they can change the American consumers' perception that small has to equate to cheap? Now there's the burgeoning issue.

Honda and Toyota are distinctly different companies - but both build increasingly in the United States, and both are out to gain as much of the US market as possible.

Z-06 · March 26, 2008

I thought Porsche had the highest profit margins?

No when it comes to engines, Honda engines are high profit margin components. Porsche is the high profit margin automobile manufacturer.

regfootball · March 26, 2008

one thing that bothers me is Press benefited from this while at Toyota....now, he is on other team, and for him to say this, even if true, is very convenient, because it would theoretically help Chrysler, who he works for now. Then, either Chrysler gets sold and Press profits from that or he takes over Chrysler and profits from it that way.

regfootball · March 26, 2008

i still fickung hate toyota though, regardless.

want a laugh? read C/D review of the corolla XRS......LOL

Z-06 · March 26, 2008

Then you'll still be blaming Toyota in ten years' time. The truth is they've capitalised on the American market in particular for donkey's years now and the US automotive industry has basically let that happen, whether the issue be one of brand perception, or discounting, or even where US manufacturing facilities are located. Toyota have an ability to appeal to a large swathe of American consumers - if they didn't, then the domestic product wouldn't have anything to worry about.

There is difference between trouncing a competition in a fair game vs. punching out the competition with jury on their side and opponents' hands tied. How can someone say that Toyota and Japan are playing it fare? When,

a) Japan does not have market open for foreigners like we do.

b) Getting under table support for their agendas and researches.

c) Copying technology and other components as much as they can.

I agree with siegen that Honda and Toy should not be lumped in the same banner. If Toy was technology genious then they should have slaughtered their competition away in F1 races, the last I know they are yet to finish first after 107 races. Honda's technology is good. The Hondajet is pinnacle of how they have utilized their tech resources. Toy's strong point is production, marketing and that is it. That is what drives the market.

No one here denies the fact that Detroit lost it in 80's because of many reasons. But that is only one side of the coin. No person who is familiar with this topic can deny that Toyota has got a free pass with their acts in this country.

So how do you propose that GM drastically reduce its overhead expenditure and build small cars in the United States? Become non-unionised? Offer little or no benefits-in-kind? Use poorer quality materials? Keep model specs to a minimum? Simply reduce labour rates? Alternatively, do you think they can change the American consumers' perception that small has to equate to cheap? Now there's the burgeoning issue.

That is where the 2007 Union deal came into picture. And like some others have posted, the overheads can be reduced if government supports their healthcare and takes some of its responsibilities. GM will not have to spend $51 billion to create VEBA if Washington can call for a government funded health care system. That money can be used wisely for other developments. If you look at the Cobalt, at that price it is almost as loaded to a more expensive Civic or Corolla if not more.

Small equates to cheap is not only for GM cars. It is in general a perception for all the small cars being sold here. That is part of the reason why Audi A3 has not been a stellar success here. Other than few soft spot vehicles like Golf (nee Rabbit), we will not see any time soon whole hearted acceptance to smaller vehicles that are loaded, and priced $3-4 G lower than their bigger siblings.

Honda and Toyota are distinctly different companies - but both build increasingly in the United States, and both are out to gain as much of the US market as possible.

That is capitalism, if Tata come tomorrow to compete, it will target US market the same way.

March 26, 2008

a) Japan does not have market open for foreigners like we do.
b

Really? Everyone from Rover to Opel, Cadillac to Ford sells cars in Japan. Lincoln sell there and don't even bother converting their products to RHD.

Given that Japan is an extraordinarily urbanised country, pay substationally more than the US does for fuel, and that the Japanese are taxed on vehicle ownership above the kei-class (and punitively on cars larger than D-segment), how many American cars would be attractive to the average Japanese person?

I'm thinking Dodge Caliber CRD - which is in fact sold there. Dodge happens to offer the Avenger, Nitro and even the Charger there too, the last two of which will have limited appeal.

And I can't think of anything else whatsoever from the USA which would fit the bil given these circumstances.

The difference between America and Japan is simple: the Japanese gear their cars towards the market preferences of the countries it sells in. The Americans take their preferences in cars and hope that other countries will simply accept them.

March 26, 2008

"Small equates to cheap is not only for GM cars. It is in general a perception for all the small cars being sold here."

No doubt. But Americans buy Corollas and Civics in droves.

Z-06 · March 26, 2008

Really? Everyone from Rover to Opel, Cadillac to Ford sells cars in Japan. Lincoln sell there and don't even bother converting their products to RHD.

Yes they do. But not without "taxes" unlike here where there are no taxes levied for import vehicles. Neither can a foreign company buy majority stakes into a company incorporated in Japan, and nor can a foreign company build a plant in Japan for manufacturing. In broader sense yes they are open to market but with those caveats.

Z-06 · March 26, 2008

"Small equates to cheap is not only for GM cars. It is in general a perception for all the small cars being sold here."
No doubt. But Americans buy Corollas and Civics in droves.

They have gotten the perception of being cheap and "reliable".

And Corolla is fleeted into Avis, Enterprise, and Hertz.

Edited March 26, 2008 by smallchevy

March 26, 2008

Yes they do. But not without "taxes" unlike here where there are no taxes levied for import vehicles. Neither can a foreign company buy majority stakes into a company incorporated in Japan, and nor can a foreign company build a plant in Japan for manufacturing. In broader sense yes they are open to market but with those caveats.

The EU levies import duties on all cars built outside of the EU also. That's a problem for the US industry to sort out by making its cars more affordable for export markets, which given the weak dollar shouldn't be that much of a problem.

The big issue is not Japanese taxation or Japanese company law; its the inability of American companies to provide the Japanese with cars suitable for mainstream buyers given the market dictates there. Cadillacs and Lincolns may sell there, but they're always going to be niche products in Japan. Don't expect those vehicles to work there in the same way a Corolla does in America.

If the Americans can build B-segment cars without relying on foreign subsidiaries and make them suitable for Japanese market dictates and road conditions, then you'll start getting closer to your level playing field. Until that time comes, forget it.

Z-06 · March 26, 2008

The EU levies import duties on all cars built outside of the EU also. That's a problem for the US industry to sort out by making its cars more affordable for export markets, which given the weak dollar shouldn't be that much of a problem.
The big issue is not Japanese taxation or Japanese company law; its the inability of American companies to provide the Japanese with cars suitable for mainstream buyers given the market dictates there. Cadillacs and Lincolns may sell there, but they're always going to be niche products in Japan. Don't expect those vehicles to work there in the same way a Corolla does in America.

If the Americans can build B-segment cars without relying on foreign subsidiaries and make them suitable for Japanese market dictates and road conditions, then you'll start getting closer to your level playing field. Until that time comes, forget it.

But the problem is that dollar is not weak against the yen. Subsidiaries are the sole purpose of a global company to penetrate into markets which otherwise will not be gotten into by the main company. GM as such is striving to be one, so it does not matter if Chevrolet or Opel enters Japanese markets. Dollars for development of either come from one Global GM. Sure there are tarrifs levied by Europe, but the last time I checked, they were less than those levied by the Japanese. There is a difference between selling heavily taxed small number cars to rich buyers, who either way do not care about those; to that of smaller vanilla vehicles where quantity drives the revenue. The fact that Europeans and Koreans who do make cars that can be sold in Japan did not make into the top 10 selling vehicles in Japan tells you something about how "open" their market is.

Why should Americans rely on itself to produce smaller cars, when their subsidiaries are doing the work? Designing and developing multiple products and platforms at varied locations is how GM lost money, and doing that again is like repeating the mistakes. The answer is global GM, do not look GM as Vauxhall, Opel, Pontiac or Chevy. Look at it as one place where revenue is sent to different places which hold expertise in different car classes, markets, economies to build vehicles that will cater them yet have the same basic fundamentals.

March 26, 2008

But the problem is that dollar is not weak against the yen. Subsidiaries are the sole purpose of a global company to penetrate into markets which otherwise will not be gotten into by the main company. GM as such is striving to be one, so it does not matter if Chevrolet or Opel enters Japanese markets. Dollars for development of either come from one Global GM. Sure there are tarrifs levied by Europe, but the last time I checked, they were less than those levied by the Japanese. There is a difference between selling heavily taxed small number cars to rich buyers, who either way do not care about those; to that of smaller vanilla vehicles where quantity drives the revenue. The fact that Europeans and Koreans who do make cars that can be sold in Japan did not make into the top 10 selling vehicles in Japan tells you something about how "open" their market is.
Why should Americans rely on itself to produce smaller cars, when their subsidiaries are doing the work? Designing and developing multiple products and platforms at varied locations is how GM lost money, and doing that again is like repeating the mistakes. The answer is global GM, do not look GM as Vauxhall, Opel, Pontiac or Chevy. Look at it as one place where revenue is sent to different places which hold expertise in different car classes, markets, economies to build vehicles that will cater them yet have the same basic fundamentals.

I'll counter these points in turn as you raise them:

The dollar has fluctuated heavily against the Yen, especially recently.

Subsidiaries do indeed delve into different markets, but foreign subsidiaries of American car companies do absolutely nothing for the US autoworker. The primary beneficiary of selling an Opel in Japan is the British car industry, as Vauxhall builds the majority of RHD Astras and Vectras (for example) to worldwide markets under the Opel and Holden banners.

In actual fact Swiss-based GM Europe works almost entirely autonomous of GM in North America. For example, it is solely charged with making all decisions regarding the new Delta II platform and will do so for all future variations of it. GM isn't a single pot of money distributed worldwide; it is a host of multiple businesses each with its own cost centres. Unlike Pontiac and Chevrolet, Vauxhall and Opel are separate legal entities from GM; they're wholly-owned subsidiaries each with their own balance sheets, unlike Pontiac and Chevrolet which are merely owned brand-names. Please don't start with the whole "profits go to such and such" crap either - the profits of Vauxhall and Opel do not all magically end up in the United States.

It's completely irrelevant how much import duty Japan taxes. Part of being a business which operates globally is to effectively deal with different markets in a cost-effective manner. If you can't then you pull out. If the USA slapped a 15% import duty tomorrow on non-US built cars, it would all but kill European imports already burdened by a weak dollar. It probably wouldn't hurt the Japanese manufacturers who already build Japanese-developed models inside the US, and in all honesty most Americans probably would pay an extra 15% on cars which did indeed come from Japan simply because they best fit the reliable appliance bill. However, if import duty were slapped on cars coming in from Canada and Mexico, the US Big 3 would suffer some pretty considerable damage.

So there isn't a single American car in the Japanese top 10. Well, there isn't a single American car in the European top 10, either.

Why should Americans build small cars themselves for export? How about protecting the US autoworker, taking advantage of a weak dollar and building an image of offering viable competition to the Europeans and Asians in most global markets? You never know, it might also help your trade deficit ...

Edited March 26, 2008 by aatbloke

Z-06 · March 27, 2008

I'll counter these points in turn as you raise them:
The dollar has fluctuated heavily against the Yen, especially recently.

Fluctuation does not mean that it is not overvalued. It is a known fact that Japan invests heavily in T-Bonds to keep their currency undervalued.

In actual fact Swiss-based GM Europe works almost entirely autonomous of GM in North America. For example, it is solely charged with making all decisions regarding the new Delta II platform and will do so for all future variations of it. GM isn't a single pot of money distributed worldwide; it is a host of multiple businesses each with its own cost centres. Unlike Pontiac and Chevrolet, Vauxhall and Opel are separate legal entities from GM; they're wholly-owned subsidiaries each with their own balance sheets, unlike Pontiac and Chevrolet which are merely owned brand-names. Please don't start with the whole "profits go to such and such" crap either - the profits of Vauxhall and Opel do not all magically end up in the United States.

Here is the Annual Report for 2006, I fail to see seperate balance sheets for Vauxhall and Opels, please educate me where can I see the wholly-owned operations on GM's balance sheet. There is not even mention of these brands under Goodwill, saying how much those particular brands are worth. Why there is no Revenue sheet on Opel/ Vauxhall website showing their own numbers? Revenues are divided into regions and they consist of Americas, Africa/ Mid East/ Asia Pacific and Europe. It seems like you are talking about GM of 2000. The last time seperate revenues were noted by Vauxall was in 2004.

Here are quotes from SEC filing: Read them carefully

It's completely irrelevant how much import duty Japan taxes. Part of being a business which operates globally is to effectively deal with different markets in a cost-effective manner. If you can't then you pull out. If the USA slapped a 15% import duty tomorrow on non-US built cars, it would all but kill European imports already burdened by a weak dollar. It probably wouldn't hurt the Japanese manufacturers who already build Japanese-developed models inside the US, and in all honesty most Americans probably would pay an extra 15% on cars which did indeed come from Japan simply because they best fit the reliable appliance bill. However, if import duty were slapped on cars coming in from Canada and Mexico, the US Big 3 would suffer some pretty considerable damage.

OK here is an example of Tarrifs outside the auto industry. Cotton has tarrifs in the US to protect the American cotton manufacturer. For years outsiders especially Africa has been clamoring to remove those duties, (read Economist). According to your theory, Africans do not have to do that as it is part and parcel of their business, and hence should compete no matter what, don't they?

Do you have market research to prove that Americans will pay X% extra to to find a reliable appliance?

Who is asking to slap import duties on vehicles coming into United States? All we are saying is that in Free Trade, it should be give and take not only give. If American market is open for car manufacturers from Japan, so should be Japan. What would be my incentive to build a product to suit your requirement if your country already puts a burden on my head? I would rather satisfy my own country's need. Regardless of how crappy they are, GM is making an effort into the Asian, Russian markets to get a stronghold, why is it not in Japan? Why is not Peugeot trying to target Japanese customer for a mass produced 207?

So there isn't a single American car in the Japanese top 10. Well, there isn't a single American car in the European top 10, either.

You answered your own question here.

If the Americans can build B-segment cars without relying on foreign subsidiaries and make them suitable for Japanese market dictates and road conditions, then you'll start getting closer to your level playing field. Until that time comes, forget it.

You say that

1 Regardless of the price customers are intelligent enough to put faith in a good product.

2 Americans lack ability of making good small cars.

3 Europeans certainly build good small cars.

First and Second points put American cars out of the picture to feature in Japanese top 10. You do not have to be a rocket scientist to come to that conclusion, based on your surmises. But is it not surprising to have not even a single European small car in Japanese top 10? Don't tell me that Japan makes too good to products compared to Europeans. Because if they do it just shows your European products are inferior or Europeans are dumb since they do not buy highly qualified Japanese Products. The last time I read (2006), Toyota is not even in the top 10 of Europe, hmm wonder why? Don't you think some thing does not make sense with respect to this descripancy? American manufactured cars bombing in both markets makes sense, according to your second surmise. But come on, not even one highclass Euro small car in Japan top 10?

How about protecting the US autoworker, taking advantage of a weak dollar and building an image of offering viable competition to the Europeans and Asians in most global markets? You never know, it might also help your trade deficit ...

Please read the forums, this is what we have always talked about and now your are cirumventing to this point. One of Gamma II/ Delta II is supposed to be produced in Lordstown Ohio.

Jim Taylor, president Cadillac best summed it. We have created a CTS that is a true world luxury car, and it is. We are going out of bounds to make sure that we offer a superior product. We overhauled our dealership base, reached the consumer to know what they are looking for, and put our advertising targets different in markets. But European market is difficult to crack, because it is a closed market. People buying there know for a fact for every non European product they buy there will be someone in Europe loosing a job. So despite being a superior product, they will not embrace it whole heartedly. That gives an answer for why Japanese cars do not make the top 10 in Europe. Unfortunately Americans lack this mentality. For every one stuff they buy in Wal Mart because it is cheap, there is one distant cousin of ours in Alabama who has lost the Job to a person in Wengfu province of China. Yes Japanese companies manufactured vehicles in US and added 5,000 jobs in 2006, making a notion of creating jobs. But Detroit lost 90,000 in the same time, which means there is a deficit, or those people got crunched at the rate of 1:18 to fill the 5,000 jobs. Yes GM provides labor to Europe and it benefits Europe. Yet when GM is staring in the barrels they are trying to trim 10% of their work force.

This still does not put out the fact that Japanese market is closed and those tarrifs are meant to prevent any product stealing their jobs.

March 27, 2008

"Fluctuation does not mean that it is not overvalued. It is a known fact that Japan invests heavily in T-Bonds to keep their currency undervalued."

One could argue that the USA deliberately devalues its currency against European currencies by lowering its interest rates during tougher economic times in order to stem European imports. What you're saying is pure conjecture, and there is no concrete proof that the Japanese toy with its currency to make US imports unattractive. The problem is that the USA produces very few cars that have any universal appeal to the average Japanese urbanite and the constraints they face with taxation, safety inspection costs (which are punitive) and other measures regarding car ownership in that country.

These graphs show the slide in the value of the USD against the Euro and the Yen over the past three months alone:

http://www.x-rates.com/d/USD/EUR/graph120.html

http://www.x-rates.com/d/USD/JPY/graph120.html

"Here is the Annual Report for 2006, I fail to see seperate balance sheets for Vauxhall and Opels, please educate me where can I see the wholly-owned operations on GM's balance sheet. There is not even mention of these brands under Goodwill, saying how much those particular brands are worth. Why there is no Revenue sheet on Opel/ Vauxhall website showing their own numbers? Revenues are divided into regions and they consist of Americas, Africa/ Mid East/ Asia Pacific and Europe. It seems like you are talking about GM of 2000. The last time seperate revenues were noted by Vauxall was in 2004."

You are looking at GM's group accounts (also known as consolidated accounts), which are a requirement under company law in the majority of countries worldwide, as well as under GAAP and IAS regulations. Such accounts consolidate the operations of the parent company and its subsidiaries globally, and are often shown in a simpler format since intercompany loan accounts are often contra'd out and more straightforward for investors to understand. Likewise, the breakdown of regional revenue by continent is simply information for investors. It is not a legal requirement and not reflective of a breakdown by individual subsidiary company, which would also be optional.

Given that only purchased and amortised goodwill is allowed to be shown the balance sheet these days under IAS, then you will not see any goodwill disclosed relating for the purchase of Vauxhall Motors Ltd in 1926 or Adam Opel GmbH in 1929.

The notes to the accounts are standard fare for any company - including public companies - although listed companies are subject to additional disclosures under SEC rules but only in the United States.

Vauxhall Motors Ltd draws up its own annual accounts as required by the British Companies Acts 1985/1989 as it is a registered company in England & Wales. Likewise, German company law requires Adam Opel GmbH to do the same. Both are private wholly-owned subsidiary companies of General Motors in America, so you're unlikely to find their accounts on the internet as you would a public company.

Before you continue along this road, I can tell from your language and case presentation that you are not an accountant or a businessman. I would point out that I am a qualified accountant with some 25 years' experience in the industry, so please choose your arguments very carefully indeed.

"You say that

1 Regardless of the price customers are intelligent enough to put faith in a good product.

2 Americans lack ability of making good small cars.

3 Europeans certainly build good small cars."

I dispute point 2. American companies have the ability, but they simply choose not to.

"You answered your own question here."

I didn't ask a question, let alone answer it.

"First and Second points put American cars out of the picture to feature in Japanese top 10. You do not have to be a rocket scientist to come to that conclusion, based on your surmises. But is it not surprising to have not even a single European small car in Japanese top 10? Don't tell me that Japan makes too good to products compared to Europeans."

There are no American or European cars in the Japanese top 10, just as there are no American or Japanese cars in the European top 10 ... and to that end, let me give you a few pointers as to why:

1) Insurance rates in many European countries for Japanese cars are very high due to parts replacement costs.

2) Many large Japanese and American cars are not to most European tastes and often consigned to niche/alternative buying habits. In addition, large American and Japanese cars have few diesel offerings compared to European rivals.

3) Europe has a huge company car market, and due to lease arrangements/insurance rates, many companies restrict the choice of company cars to locally produced models.

"OK here is an example of Tarrifs outside the auto industry. Cotton has tarrifs in the US to protect the American cotton manufacturer. For years outsiders especially Africa has been clamoring to remove those duties, (read Economist). According to your theory, Africans do not have to do that as it is part and parcel of their business, and hence should compete no matter what, don't they?"

The US has no obligation to any country to remove any tariff or import duty, as long as it doesn't contravene any prior international agreement.

"Do you have market research to prove that Americans will pay X% extra to to find a reliable appliance?"

No. The current-generation Civic costs some 10% more than the old model yet enjoys similar levels of popularity.

"Who is asking to slap import duties on vehicles coming into United States? All we are saying is that in Free Trade, it should be give and take not only give. If American market is open for car manufacturers from Japan, so should be Japan."

A business either deals with import duties - and Japan's are as legitimate as the EU's - or it chooses not to enter that market if it feels such duties would price its products out of the market. You can't dictate to other countries how they choose to protect their economies. The problem isn't Japan's import duties; the problem is that the USA doesn't build cars which are attractive to, or right for, the mainstream Japanese buyer, especially urbanites faced with exhorbitant taxation and safety inspection premiums.

"Please read the forums, this is what we have always talked about and now your are cirumventing to this point. One of Gamma II/ Delta II is supposed to be produced in Lordstown Ohio."

I don't need to read these forums since my knowledge comes straight from the industry connections I have. Lordstown is due to get one vehicle which will use the Delta II platform, but the platform itself (like the original Delta platform) will be engineered entirely in Germany. Whatsmore, GM Europe will develop the Delta II autonomously. This article gives some guidance:

http://en.wikipedia.org/wiki/GM_Delta_platform

"Jim Taylor, president Cadillac best summed it. We have created a CTS that is a true world luxury car, and it is. We are going out of bounds to make sure that we offer a superior product. We overhauled our dealership base, reached the consumer to know what they are looking for, and put our advertising targets different in markets. But European market is difficult to crack, because it is a closed market."

The CTS is a fine car. If it came with a range of four cylinder engines and was the size of a Focus, Cadillac could potentially have a winner on their hands in Europe - but it's not pitched in prime C-segment territory; it's marketed in the more restrictive mid-exec E-segment. If you want to succeed in Europe in the mid-exec segment, you will need at least four petrol and two diesel engine options for a kick-off as is the case with the 5-series, E-Class and A6. The CTS arrives with two petrol engines and no diesel, which will immediately limit its appeal considerably. So to Americans, who cannot adapt or are unwilling to engineer their products well to the desires of other markets, those markets are "closed markets."

The Australian market is more of a closed market because left-hand drive cars are actually illegal to operate on public roads. So if your product isn't engineered for easy conversion to RHD (such as the Mercedes GLK-Class) then you're basically buggered.

But go to any US authorised import agent under the NHTSA and they'll tell you that the largest closed market in the world is in fact North America. North America works to a separate set of operational standards (SAE) to the rest of the world (which uses the European E-standard) in automotive lighting alone. You cannot privately import any car there unless either the same or a substantially similar model has been sold there and undergone federal crash and emissions testing. This isn't the case in Europe, which has single vehicle type approval laws, which can mean expensive modifications but aren't prohibitive as is the case in the USA. Ever heard the story of the Escort RS Cosworth? Some eight examples exist in America, most through Sun Imports of Arizona. Ford would not approve importation of the car, and insisted that all cars be dissembled in kit form, modified, crash tested and debadged before entering the USA, and then assembled. Through a process costing an exhorbitant amount of money, Sun managed eventually to get several examples certified, though it tripled the cost of each vehicle.

Edited March 27, 2008 by aatbloke

regfootball · March 27, 2008

so, japan paid for hybrid synergy drive.

and honda got screwed because now they give up on the accord hybrid and have to go diesel

March 27, 2008

so, japan paid for hybrid synergy drive.
and honda got screwed because now they give up on the accord hybrid and have to go diesel

Honda have offered diesels for a number of years. Just not in your country.

CARBIZ · March 27, 2008

It's 7 a.m. I just read the last page or so of discourse. I guess my past 35 years of education and experience has been wrong. I stand corrected.

MITI does not exist.

Japan throws its doors wide open to any and all competition. (I guess the people at Toys R Us were just plain incompetent when it took them 5 years to open their first store.)

Japan builds the best cars on earth, which is why no GM, VW, BMW, Mercedes, Audi, Fiat or any other cars sell more than a handful in Japan.

GM and Ford are purely American companies that build and sell cars only in America, not Canada, Germany, Brazil or the UK: those companies are separate entities that are not

beholden in any way to Detroit or New York.

The fact that a Ford Mustang (highly covetted in Japan) costs about DOUBLE what it does here, must be Detroit's fault, too. Have I left anything out?

Ladies and gentlemen, please restrict ourselves to exclamations about the beauty and features on automotive products, we are too simple and uneducated to understand high finance and international trade. Japan Inc has found another convert to represent them.

March 27, 2008

It's 7 a.m. I just read the last page or so of discourse. I guess my past 35 years of education and experience has been wrong. I stand corrected.
MITI does not exist.

Japan throws its doors wide open to any and all competition. (I guess the people at Toys R Us were just plain incompetent when it took them 5 years to open their first store.)

Japan builds the best cars on earth, which is why no GM, VW, BMW, Mercedes, Audi, Fiat or any other cars sell more than a handful in Japan.

GM and Ford are purely American companies that build and sell cars only in America, not Canada, Germany, Brazil or the UK: those companies are separate entities that are not

beholden in any way to Detroit or New York.

The fact that a Ford Mustang (highly covetted in Japan) costs about DOUBLE what it does here, must be Detroit's fault, too. Have I left anything out?

Ladies and gentlemen, please restrict ourselves to exclamations about the beauty and features on automotive products, we are too simple and uneducated to understand high finance and international trade. Japan Inc has found another convert to represent them.

Hmmm - someone's intimidated.

Nobody's saying Japan is the best. But all I see is Americans blaming the Japanese at every corner for their own faults which are obvious to others. I've seen it before: the British were also pretty good at blaming everyone else back in the late 1970's.

You also need to understand that corporate structure isn't as simple as playing with a Lego set. Ford is American, but its subsidiaries around the world are not: Ford GB Ltd and Ford-Werke GmbH are not American, and Ford of Detroit charges Ford-Werke GmbH - which it houses its European Ford of Europe arm out of - with autonomous control over the entire European operation. Same goes for GM: Adam Opel GmbH and Vauxhall Motors Ltd are British companies - subsidiaries of GM in America, but they're under the umbrella of Zurich based GM Europe in terms of day to day operations.

If you think that Opel is American just because GM own its share certificates, then by the same rationale GM can't be American - because its share certificates are owned by nationals worldwide.

Buy a Mustang in the UK through a private importer and you'll end up paying as much for it as a mid-range BMW 5-series.

I understand that you're passionate young Americans who want their industry to succeed, but if you blinker yourself to how things actually work out of blind nationalism, it'll be 2018 and you'll still be blaming the Japanese.

Oh, and sorry, but when I see someone asking blatantly stupid questions when looking at a set of group accounts, then no, I don't believe they have any idea about international finance or trade. That's like an accomplished cook asking an accountant how to make a pavlova.

Edited March 27, 2008 by aatbloke

Newbiewar · March 27, 2008

you sir have an extremely misconstrued vision of the japanese government. perhaps sipping too much of toyota's coolaid

As an example of a consumer "protection" law really created to prevent foreign competition in Japan, one may look at the auto industry. All non Japanese cars which enter Japan today must be "safety-tested" by Japan for "safety to the consumer". The f ee for this "safety-test" is several thousand dollars PER CAR imported and must be borne by the importer (and consequently the buyer) of the car. Cars made by Japanese companies (even if they originate from foreign Japanese plants such as the US Honda Acc ord plant) are exempted from the inspection and the fee as Japanese car companies are permitted to "safety" their cars themselves at their factories. The result of this practice is to make the prices of non-Japanese brand cars uncompetitive against Japane se brands sold within Japan. This law adds upwards of $5000 to the price of each US car for sale in Japan. [New York Times/CNN 12/25/92]. To further discourage non-Japanese car purchases in Japan, auto insurance rates for non Japanese brand cars in Japan have been rigged by auto producers (who own many of the insurance companies) to be three times higher than rates charged for equivalent Japanese brand cars [Agents of Influence p156]. It is these practices and laws (and not that the steering wheel is on t he wrong side) that prevent US car companies from making headway in the Japanese market. Both GM and Ford ship cars to Japan with the steering wheel on the correct side for Japanese roads [Agents of Influence p156].

and because they are so protective of their own ecconomy and their own markets, the japanese manufactures (all products, not just auto) and dump products into our market. look at the past and tell me this isnt true.

Many Americans think that Japanese companies are foolish because they practice "dumping" (selling their products here for a price lower than it costs to make them), and hope Japan continues as it benefits the American consumer. Such thinking is misg uided and shows how it is very difficult to understand why Japanese business practices are so dangerous to America.
Some Americans think buying dumped products is good. This happens because they don't see the real costs to themselves which are not on the low sticker price. These costs turn out to be higher to the buyer than the savings on the product price (otherw ise the Japanese would not be dumping... ...there's no such thing as the deal that's too good to be true). The key is that this cost is indirect but very real nevertheless. It turns up somewhere else than at the checkout counter and is how Japan profits b y "dumping".

The cost to America (and the benefit to Japan) turns up in the long term. This is why it is not seen so easily. It turns up in America as unemployment, closed factories and reduced national strength as US companies cannot compete against this practic e and hence go bankrupt. Japan's factories run, their people get jobs and later on Japan makes much more profit than it originally cost to do the dumping once the non Japanese competition has been wiped out by the practice. Japan can do dumping by raising prices in the protected home Japanese market to pay for dumping in America. US companies don't have this luxury as the US market is open to the outside world and prices cannot be artificially raised to pay for dumping elsewhere.

Japanese are extremely racist, stereotypically speaking, but they will smile to your face. they really are against anything forgien, unlike americans who tend to prefer anti american goods.

DISCRIMINATION AND RACISM:
Although the Japanese are individually are very polite people, Japan is a very racist country, maybe even more so than America is. A common name Japanese use for the white European race is "gaijin". Although its literal translation is innocuous, it i s a loaded word. "Gaijin" is a racial slur somewhat in the way "colored" used to refer to a black person in America. There is however a polite form of this word, "gaikokujin", which means literally "outsider country person".

When you enter a rental agency to rent an apartment (the only way to get an apartment in Tokyo), some of the rental books say on the cover "no gaijin". If you are a gaijin, you cannot rent anything in these books. There are also a fair number of rest aurants and bars in Japan that do not welcome/serve "gaijins" (a point made once you enter or try to get service at the establishment).

Discrimination does not extend only to foreigners. Looking through any major newspaper, you will see ads which ask for Japanese only (no foreigners), men only, young women only, or people of a certain age. Discrimination doesn't seem to be illegal in Japan. A law does exist however stating that it is a Japanese "goal" not to have discrimination (hint:this is Tatemae). This "anti-discrimination" goal/law does not seem to be enforced in any way. Socially, races are ranked in a kind of status order in J apan, first are Japanese, then caucasians, other asians, then all other races besides black people, who are last.

Such racism is sometimes reflected in disturbing comments directed towards America by high ranking Japanese officials: The Speaker of the Lower House of the Japanese Diet states that Americans are lazy, illiterate and that the U.S. is becoming Japan' s subcontractor [Time 2/10/92 p17]. Ex-Prime minister Miyazawa states that American servicemen (protecting Japan) can't afford to take shore leave anymore (due to the high yen), so they'll have to stay aboard their ships and give each other Aids. Yasuhiro Nakasone, an ex-Japanese Prime Minister, states that "America's intellectual level is lower than Japan's because American society has too many blacks, Mexicans and Puerto Ricans" [Yen! p73]. A widely quoted study in Japan claims that the Japanese race is superior because Japanese brains develop differently than those of other races [Tadanobu Tsunoda, The Japanese Brain: Uniqueness and Universality, Tokyo Taishukan Publishing Co. 1985].

Such thoughts extend to immigration policy as well. As a result, the number of people accepted as Japanese citizens or as immigrants to Japan is very very small in number each year. It is claimed that Japan sees it as an advantage to maintain a racia lly pure society as it is less "disruptive" to social order [Yen! p74].

let me know if i should continue, but if you are trying to say that GM's products dont sell in japan because they are irrelivant product, that is very far from the truth.

March 27, 2008

you sir have an extremely misconstrued vision of the japanese government. perhaps sipping too much of toyota's coolaid
and because they are so protective of their own ecconomy and their own markets, the japanese manufactures (all products, not just auto) and dump products into our market. look at the past and tell me this isnt true.

Japanese are extremely racist, stereotypically speaking, but they will smile to your face. they really are against anything forgien, unlike americans who tend to prefer anti american goods.

let me know if i should continue, but if you are trying to say that GM's products dont sell in japan because they are irrelivant product, that is very far from the truth.

Actually I do not. I am fully aware of MITI's extraordinary influence of Japanese trade practices - but that was thirty years ago. Remember how the Italians refused entry of Japanese cars during the 1970's and into the 1980's due to trade disputes caused by MITI? That's why ARNA came into being. By the late 1980's however, ARNA became irrelevant as trade routes re-opened between the two countries. MITI itself gradually because less influencial and today no longer exists. Its replacement is far more lenient towards imported goods and far less protectionist of its own industry.

Tell me why American-built cars for the most part don't work outside of North America? Do you think it possibly has anything to do with the fact that most aren't right for the market? Take the Chevrolet Blazer in the 1990's as a perfect example: in 1997 GM decided to export it to the UK. Fine, except for three issues:

1) Its overtly American looks did not suit local tastes;

2) Its 4.3 litre petrol and no diesel option was going to give it very limited appeal, due to high fuel costs and high insurance costs on such vehicles. High C02 emissions on large engined cars nwo restrict that appeal even further due to costly road tax/registration costs.

3) There was no RHD market on a vehicle intended for a RHD market. This not only increases insurance costs further but also makes residuals plummet.

Of course, it didn't sell. Even a later RHD conversion couldn't save it. Was it a bad car in itself? No. But it was a bad car for the market.

Do you think the average Japanese, paying $5+ a gallon and subject to heavy taxation and insurance burdens on cars larger than the kei-class and A-segment in many urban areas, are going to clamour for a Chrysler 300, Ford Mustang or Chevrolet Impala?

You state that "both GM and Ford ship cars to Japan with the steering wheel on the correct side for Japanese roads." This is blatantly untrue. The Ford Explorer and Chevrolet Cavalier - badged a Toyota - were available in RHD. The Ford Mustang, Lincoln Town Car and Chevrolet Corvette were sold there in LHD form only. Most of Ford's other products in Japan - Ka, Fiesta, Focus and Mondeo - hailed direct from Ford of Europe and all were sold in RHD form, and indeed still are. Opel's line-up were all RHD also, sourced directly from Vauxhall plants in the UK for the most part. GM Europe made the decision to pull Opel out of Japan because of very low unit profitability.

Dodge has now entered the European and Japanese markets with probably the most internationally credible range to come from the United States: a C-segment hatch, a D-segment saloon, an E-segment executive car, and a token small SUV. There's no doubt that Dodge will take some time to build brand recognition in Japan, however in order to really succeed it needs to built the Hornet to provide them and Europeans with an original American interpretation of a B-segment hatchback.

Edited March 27, 2008 by aatbloke

regfootball · March 27, 2008

Honda have offered diesels for a number of years. Just not in your country.

no, i am saying Japan told toyota they would do the hybrids and Honda won't, as much.

March 27, 2008

no, i am saying Japan told toyota they would do the hybrids and Honda won't, as much.

You really make very little sense. Both Honda and Toyota gunned the hybrid route in North America where NOx particulate emissions regulations preclude even Euro IV-compliant diesels for the most part. In Europe though, hybrid technology is still skeptically regarded by the motor trade where diesel is in such abundance.

Polish_Kris · March 27, 2008

Why the American government doesn't help any of their manufacturers is beyond me.

Because they have more important things to fund, like the war in Iraq!

The O.C. · March 27, 2008

No doubt. But Americans buy Corollas and Civics in droves.

I have to admit..... :pokeowned:

The O.C. · March 27, 2008

Actually I do not. I am fully aware of MITI's extraordinary influence of Japanese trade practices - but that was thirty years ago. Remember how the Italians refused entry of Japanese cars during the 1970's and into the 1980's due to trade disputes caused by MITI? That's why ARNA came into being. By the late 1980's however, ARNA became irrelevant as trade routes re-opened between the two countries. MITI itself gradually because less influencial and today no longer exists. Its replacement is far more lenient towards imported goods and far less protectionist of its own industry.
Tell me why American-built cars for the most part don't work outside of North America? Do you think it possibly has anything to do with the fact that most aren't right for the market? Take the Chevrolet Blazer in the 1990's as a perfect example: in 1997 GM decided to export it to the UK. Fine, except for three issues:

1) Its overtly American looks did not suit local tastes;

2) Its 4.3 litre petrol and no diesel option was going to give it very limited appeal, due to high fuel costs and high insurance costs on such vehicles. High C02 emissions on large engined cars nwo restrict that appeal even further due to costly road tax/registration costs.

3) There was no RHD market on a vehicle intended for a RHD market. This not only increases insurance costs further but also makes residuals plummet.

Of course, it didn't sell. Even a later RHD conversion couldn't save it. Was it a bad car in itself? No. But it was a bad car for the market.

Do you think the average Japanese, paying $5+ a gallon and subject to heavy taxation and insurance burdens on cars larger than the kei-class and A-segment in many urban areas, are going to clamour for a Chrysler 300, Ford Mustang or Chevrolet Impala?

You state that "both GM and Ford ship cars to Japan with the steering wheel on the correct side for Japanese roads." This is blatantly untrue. The Ford Explorer and Chevrolet Cavalier - badged a Toyota - were available in RHD. The Ford Mustang, Lincoln Town Car and Chevrolet Corvette were sold there in LHD form only. Most of Ford's other products in Japan - Ka, Fiesta, Focus and Mondeo - hailed direct from Ford of Europe and all were sold in RHD form, and indeed still are. Opel's line-up were all RHD also, sourced directly from Vauxhall plants in the UK for the most part. GM Europe made the decision to pull Opel out of Japan because of very low unit profitability.

Dodge has now entered the European and Japanese markets with probably the most internationally credible range to come from the United States: a C-segment hatch, a D-segment saloon, an E-segment executive car, and a token small SUV. There's no doubt that Dodge will take some time to build brand recognition in Japan, however in order to really succeed it needs to built the Hornet to provide them and Europeans with an original American interpretation of a B-segment hatchback.

Your arguments regarding the automotive market here versus Japan and Europe is SPOT-on......most people in this country simply don't understand the nuances surrounding automotive markets around the world......

(such as your mentioning of the European company car statistics......something we simply don't encounter here in the same vein.)

I'm also surprised you didn't bring up the hideous taxation rates that Europe (I'm more familiar with Britain's taxation policy) imposes on "contract hire" (company) cars.......those taxation rates flucutate wildly.....not only from car model to car model (Mondeo to Focus to Fiesta) but even something as simple as drivetrain choice for a single model of car.

These are prime examples of factors that greatly influence purchase (or company car) decisions in Europe.....factors we simply don't have to deal with over here.

cletus8269 · March 27, 2008

So how do you propose that GM drastically reduce its overhead expenditure and build small cars in the United States? Become non-unionised? Offer little or no benefits-in-kind? Use poorer quality materials? Keep model specs to a minimum? Simply reduce labour rates? Alternatively, do you think they can change the American consumers' perception that small has to equate to cheap? Now there's the burgeoning issue.

it may be just me... but that kinda sounds like toyotas plan... hehe

March 27, 2008

Your arguments regarding the automotive market here versus Japan and Europe is SPOT-on......most people in this country simply don't understand the nuances surrounding automotive markets around the world......
(such as your mentioning of the European company car statistics......something we simply don't encounter here in the same vein.)

I'm also surprised you didn't bring up the hideous taxation rates that Europe (I'm more familiar with Britain's taxation policy) imposes on "contract hire" (company) cars.......those taxation rates flucutate wildly.....not only from car model to car model (Mondeo to Focus to Fiesta) but even something as simple as drivetrain choice for a single model of car.

These are prime examples of factors that greatly influence purchase (or company car) decisions in Europe.....factors we simply don't have to deal with over here.

Cars on contract hire are subject only to 17.5% VAT on each month's rental. Cars on hire purchase or lease purchase are subject to 17.5% VAT on the entire cost of the car, plus delivery.

Contract hire rates are based on known depreciation rates. As a result, you can contract hire a Golf GTi for considerably less money than you can a Focus Ghia.

Income tax on company cars is based primarily on 35% of the vehicle's list price, and the graded in bands dependent upon the cars's official Government C02 emissions. An adjustment is then made as to whether the car performs more than 18K miles per annum (the charge is reduced) or les than 2,500 business miles (in which case the charge is increased).

regfootball · March 27, 2008

You really make very little sense. Both Honda and Toyota gunned the hybrid route in North America where NOx particulate emissions regulations preclude even Euro IV-compliant diesels for the most part. In Europe though, hybrid technology is still skeptically regarded by the motor trade where diesel is in such abundance.

Japan Inc decided it would be best for world domination to let toyota specialize in hybrids and let Honda diversify into other technologies to a greater degree, in key markets.

gm4life · March 27, 2008

This all is making sense.

The O.C. · March 27, 2008

Cars on contract hire are subject only to 17.5% VAT on each month's rental. Cars on hire purchase or lease purchase are subject to 17.5% VAT on the entire cost of the car, plus delivery.
Contract hire rates are based on known depreciation rates. As a result, you can contract hire a Golf GTi for considerably less money than you can a Focus Ghia.

Income tax on company cars is based primarily on 35% of the vehicle's list price, and the graded in bands dependent upon the cars's official Government C02 emissions. An adjustment is then made as to whether the car performs more than 18K miles per annum (the charge is reduced) or les than 2,500 business miles (in which case the charge is increased).

In the United States, if you are given a company car, you are taxed on that car as "income." However, every single company I've ever worked for that provides a company car "grosses up" your income to compensate.

At the end of the day, you pay $0 in taxes for the use of a company car. (Same thing happens if they give you a "car allowance.")

Therefore, yeah.....the Britons are taxed far harder......but company cars are far more prevelant over there as well.

March 28, 2008

In the United States, if you are given a company car, you are taxed on that car as "income." However, every single company I've ever worked for that provides a company car "grosses up" your income to compensate.
At the end of the day, you pay $0 in taxes for the use of a company car. (Same thing happens if they give you a "car allowance.")

Therefore, yeah.....the Britons are taxed far harder......but company cars are far more prevelant over there as well.

The same applies in the UK - company car tax remains far cheaper than running a car yourself and suffering the depreciation. But even so, company cars are still factored into remuneration as a whole and this is done so the employee receives as maximum a benefit as possible. Only those doing less than 2,500 business miles per annum will feel a significant drop in net pay. The UK has the largest company car market in the world, with pretty much any position of manager or above commanding a company car as part of the remuneration package.

Sixty8panther · March 28, 2008

I beleive it.... crazy.

CARBIZ · March 28, 2008

Hmmm - someone's intimidated.
Nobody's saying Japan is the best. But all I see is Americans blaming the Japanese at every corner for their own faults which are obvious to others. I've seen it before: the British were also pretty good at blaming everyone else back in the late 1970's.

You also need to understand that corporate structure isn't as simple as playing with a Lego set. Ford is American, but its subsidiaries around the world are not: Ford GB Ltd and Ford-Werke GmbH are not American, and Ford of Detroit charges Ford-Werke GmbH - which it houses its European Ford of Europe arm out of - with autonomous control over the entire European operation. Same goes for GM: Adam Opel GmbH and Vauxhall Motors Ltd are British companies - subsidiaries of GM in America, but they're under the umbrella of Zurich based GM Europe in terms of day to day operations.

If you think that Opel is American just because GM own its share certificates, then by the same rationale GM can't be American - because its share certificates are owned by nationals worldwide.

Buy a Mustang in the UK through a private importer and you'll end up paying as much for it as a mid-range BMW 5-series.

I understand that you're passionate young Americans who want their industry to succeed, but if you blinker yourself to how things actually work out of blind nationalism, it'll be 2018 and you'll still be blaming the Japanese.

Oh, and sorry, but when I see someone asking blatantly stupid questions when looking at a set of group accounts, then no, I don't believe they have any idea about international finance or trade. That's like an accomplished cook asking an accountant how to make a pavlova.

Being as I am CANADIAN, and being as General Motors is listed on the TSX as a CANADIAN car company, then I am to believe that Oshawa is fully independent and not in any way owned by General Motors in Detroit?

It so easy to see why we are in the mess that we are: lawyers and accountants can muddy the waters of any discourse or debate and it is in their best interests to do so. I have seen many, many simple issues get bled away and debated into oblivion by professional obfuscators who delight in twisting arguments to make them unnecessarily complex. Whipping out impressive charts and references to obscure links do not necessarily prove a point.

For the record, I studied Japanese trade practices when I was at university, albeit that was a long time ago. How can it be explained away that MITI granted Toshiba and others sugar beet import quotas to Japan at a $1 a ton higher than the going rate? How can it be that companies like Toys R Us, or Houidille INternational (a Texas tool and die company) had visas cancelled by the Prime Minister's office?

I am not intimidated, sir, but after posting on this site for 3 years, it gets a little wearisome to tackle every new Poster of the Month who comes along with too much time on their hands, who throws a lot of $20 words around (or in your case 15 pound words) and thinks that it is jolly good that we should have our countries bought up and exported to Asia and let our children pay for it. We only discuss the auto industry in detail because that is what this site is about, but it is not merely the auto industry that is at stake here. Japan does not practice open markets. China does not practice open markets. If we are so foolish as to think that China is 'allowing' our companies to transplant their for the over all good of the planet is stupid. Insanely stupid. Japan never even bothered to pretend foreign nationals could compete there. China is too clever to think we would be so stupid to go down that road again, so under the guise of 'partnerships' we are allowed to participate in their miracle economy.

Strange how those 'partnerships' always involve the transfer of technology, no?

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