Japan Allows American Cars in Their Cash for Clunkers Program
By Brendan Moore
In what will be a largely symbolic gesture as opposed to a change that produces big sales numbers, the Japanese government has decided to allow imported American cars to be eligible for their version of a cash-for-clunkers stimulus program.
The previous exclusion from the program was based on the fact that the imported American cars were not required to be tested under Japan’s government fuel economy standards as a result of being sold under a special waiver provision, and therefore had no official government fuel economy rating that could be used to qualify for the cash for clunkers program.
There are only around 2000 American vehicles imported to Japan every year, and of that 2000, it is believed that only about 40% of those meet Japan’s tough new fuel economy standards for 2010, which is a requirement for eligibility for Japan’s cash for clunkers initiative.
Still, Japan’s exclusion of Detroit’s models sparked outrage in Congress, where the issue made a good sound bite, if nothing else. The Japanese makes did very well in the cash for clunkers program in the US, selling almost half of all the new cars purchased under the plan. Japanese vehicles notched 319,342 sales out of an approximate 677,000 vehicles purchased.
The American cash for clunkers program, as originally proposed way back when, would have limited eligible new vehicles to domestic makes only. That provision was amended hurriedly after overseas automakers and their retail dealers, and, free trade advocates in the political spectrum, protested vigorously.
Sen. Debbie Stabenow, D-Michigan, introduced a bill earlier this month that would have required that Japan’s cash for clunkers program be opened up to American imports, and would have also required the US trade representative to file a lawsuit with the WTO (World Trade Organization) if Japan did not accede to American demands.
The inclusion of American vehicles is expected to result in around an extra 700 Detroit 3 vehicles sold in Japan under their program.
Under Japan’s cash for clunkers stimulus program, buyers who trade in a 13-year-old vehicle for any new one that meets or exceeds the country’s aforementioned tough 2010 fuel economy standards can get a tax credit of up to 250,000 yen, or about $2,800 USD.
Buyers of new vehicles that don’t have a trade-in get a smaller tax credit of up to 100,000 yen, or $1,132, for models that meet or exceed the 2010 fuel standards.
COPYRIGHT Autosavant – All Rights Reserved