Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, September 8, 1994 TAG: 9409080067
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: Journal of Commerce
DATELINE: TOKYO LENGTH: Medium
As outlined, Toyota will distribute the right-hand-drive Chevrolet Cavalier through its 51 dealer channels in line with an agreement between the two companies signed in November 1993.
Toyota has set a sales goal of 20,000 Cavaliers annually.
But at least one analyst said the move was little more than a publicity stunt designed to ease pressure built up during U.S.-Japan bilateral trade talks.
Japan is facing the threat of U.S. trade sanctions if it does not open its markets sufficiently by Sept. 30.
``This is an old story,'' said Peter Boardman, Tokyo-based auto analyst with UBS Ltd., a brokerage house. ``The Cavalier is an OK car, but there's no reason to be talking about it now.''
Boardman said the 20,000 Cavalier units aren't going to make a dent in the bilateral trade imbalance.
``Japan exports 1 million cars a year,'' he said. The 1993 U.S. trade deficit with Japan was $60 billion.
The Cavalier will be sold under the Toyota label. Currently, Toyota sells 500,000 cars a year through the 35,000 salespeople in the Toyota dealership network.
In a separate development, Japan's trade ministry announced Wednesday that it would hold working-level bilateral trade talks covering the auto sector in Tokyo next week.
The two sides also plan to hold vice ministerial or deputy secretary-level talks on autos and auto parts in Washington during the last week of the month, the Japanese trade ministry said.
Autos and auto parts are one of three priority areas covered under bilateral trade talks now under way.
The other two priority areas are insurance, and public procurement of telecommunications and medical equipment.
In contrast with insurance and public procurement, however, most analysts see little chance of a breakthrough in autos this month.
Japan's Chief Cabinet Secretary Kozo Igarashi said earlier this week an auto pact was unlikely before the Sept. 30 deadline.
Japan's auto trade accounts for more than half of its massive surplus with the United States. Toyota is Japan's largest automaker.
``Toyota is confident that this kind of cooperation between private companies will contribute to the expansion of imports the public is calling for, and will thus contribute to the promotion of a more international automobile market in Japan,'' Toyota President Tatsuro Toyoda said in a statement.
But the company also said decisions on whether to sell foreign cars or labels other than Toyota should be left up to the dealers to judge for themselves.
Toyota said success also will depend on GM's production quality.
On Tuesday, Japan announced a large jump in car imports in August, which now make up 11 percent of the market.
by CNB