Japan Alters Their Car Scrappage Scheme to Include U.S. Owned Auto Makers

Washington DC January 9, 2010; The AIADA newsletter reported that Japan's Trade Ministry changed the terms of its car scrappage incentive scheme on Tuesday to include vehicles imported from the United States, after complaints from Washington that U.S. vehicles were being excluded.

According to Reuters, Tokyo's version of the Cash for Clunkers program provides government cash to help people replace old cars with models that meet specified fuel efficiency standards.

Last week U.S. Secretary of State Hillary Clinton told Japanese Foreign Minister Katsuya Okada that concerns were rising in the U.S. Congress about Japan's scrappage scheme. But Japan's Trade Ministry reiterated in a statement on its website that although it was altering the program, the system made no distinction between domestic and foreign-produced cars, and 43 percent of imported vehicles met the conditions.

The new provisions allow the scrappage incentives to be applied to suitable cars imported under the "Preferential Handling Procedure," a 1986 agreement with the U.S. to speed the import of models that sell less than 2,000 units a year.

Last week, U.S. Congresswoman Betty Sutton introduced a resolution calling for the U.S. Trade Representative to start talks with Tokyo and urged Washington to bring a WTO case against Japan if it does not open up its program to American cars.

Japan imported about 14,000 cars from the United States in 2008, according to the Japan Automobile Importers' Association web site, compared with a total of 3.2 million new cars sold in Japan that year. (Ed Note: Hmmm seems fair to us.)

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