FEARS OF "JAPANESE INVASION"

Press, Volume CXI, Issue 32797, 23 December 1971, Page 9

FEARS OF "JAPANESE INVASION"

Threats of a largescale invasion of European markets by Japanese cars are being taken extremely seriously by British and Continental manufacturers, and they have no intention of standing by while the Japanese take over a large slice of the “European cake,” says John Langley in the “Daily Telegraph.” The policy of the European makers will be to make things as tough as as possible for the Japanese in Europe, and to attempt to push up the number of NEW T.V.R. T.V.R. Engineering, Ltd, of Britain has announced a two-seater “sports stationwaggon” body model fitted with a 2.5-litre Triumph TR6 engine giving a top speed of 120 m.p.h. The car, which is a prototype at present, has a fourspeed gearbox, disc front brakes, and independent suspension. The body is of fibreglass. Production models are expected to be available to British buyers next year for the euivalent of $5500 each.

European cars imported into Japan, Langley writes. The European should be able to find out soon whether Japan’s professed new liberalisation of its home market is all that it seems to be: certainly, the import tariff barrier has been cut to 10 per cent, which is actually 1 per cent lower than the external barriers in Britain and the Common Market. It remains to be seen whether other, more subtle barriers, such as the availability of suitable dealers and Government approval for foreign participation, will still exist. If it becomes apparent that restrictions still apply, there is bound to be some form of “backlash” against the Japanese sales drive in Europe from British and Continental motor firms and their Governments. A senior official of the motor industry said: “We are not afraid of competition as long as, we have equal terms. “It is absolutely essential, in my view, that the penetration of imports into Japan should rise from the present 1 per cent, to something like 25 per cent. Otherwise Japanese manufacturers are going to have very real advantages in world markets by virtually being able to dictate the prices at which cars can be sold.

“Without competition in their home market to reduce this strength, the rest of us will be forced, to seek Government action. Western Governments will have to consider whether they can allow their major growth industries to decline in the face of unfair competition. I believe things could come to a head in about three years.” Most experts agree that there is not much future in trying to sell to the Japanese the sort of cheap, massproduced family cars at which they have themselves become so proficient at producing over the past decade. The best hope is thought to be for the more specialised type of larger saloon or sports models. In the first nine months of this year, British Leyland, for example, sold about 500 cars in Japan—mainly Jaguar XJ6s, sports cars and, perhaps surprisingly, Minis: it believes it could sell many more, given the opportunity. Rolls-Royces also sell well. Mr P. Baynes, head of the team of consultants that produced a report on the Japanese motor industry, published by the Economic Development Committee for the motor manufacturing industry, said: “There are British cars the equivalent of which the Japanese cannot make because of their specification and excellence. They are very much farther ahead than any of the Japanese design engineers can cope with, and the

Japanese would very much like to make these cars as a joint venture.” The report ' said that Japanese cars “appear generally more reliable,” though not superior in basic design to cars in the same class produced by British and Continental manufacturers. They are also considered to be as a rule more comprehensively equipped. The strengths of the Japanese motor industry are set out in considerable detail in the report. Its international competitiveness is derived mainly from highvolume production based on a reliable home market, and from the high contribution of employees. Workers were loyal and inherently disciplined, had no restrictive practices, had been rewarded by regular annual increases in earnings of about 10 per cent in real terms and had complete job security. In addition Japanese vehicles and components seemed to be available when and where required—and availability and delivery were becoming the most important factors in world markets. There is clearly plenty here for the British motor industry to think about. Since the report was written, import restrictions in the United States—one of the chief export markets for Japanese cars—-have caused the prospect of a switch in their sales effort towards Europe.