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Will Japan open up roadways to more U.S. automakers?

Stan Alcorn Aug 19, 2013
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Will Japan open up roadways to more U.S. automakers?

Stan Alcorn Aug 19, 2013
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United States Trade Representative Michael Froman traveled to Tokyo on Monday for meetings related to a new free trade agreement called the Trans-Pacific Partnership. One key issue in trade discussion is a long-standing one: opening up the Japanese market for American automobiles.

Japanese automakers have long been successful in the U.S. market, with a market share of 36.9 percent in 2013, according to data from Edmunds.com. Toyota sells both the best-selling car in Japan and the best-selling car in the U.S.

U.S. automakers, on the other hand, have not been able to crack the Japanese market, holding less than 10 percent of it. They blame what are known as “non-tariff barriers.”

“Mostly we’re talking about regulation,” says Mireya Solís, Philip Knight Chair in Japan Studies and senior fellow at the Brookings Institution. “For example, safety standards, emission testing: all these things the producers need to comply with in order to bring their products to the market.”

The U.S. is seeking to loosen those regulations as part of the larger Trans-Pacific Partnership agreement, which has been quietly under negotiation for years. The Big 3 automakers –Ford, GM and Chrysler — emphasize the significance of accessing Japan’s market, though some analysts have doubts.

“Frankly all the growth in the future is going to be overseas, and not in Japan,” says Edmunds.com senior analyst Michelle Krebs.

Instead, growth in overseas sales will come from emerging markets, like the BRIC countries: Brazil, Russia, India and China.

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