“These latest figures should refute claims that the major surge of Japanese auto exports to the U.S. is being driven by market forces. It’s clear that the primary beneficiary of Japan’s 25-30% undervalued yen is the Japanese auto industry, which is reaping a $4,000 to $10,000 yen subsidy for every vehicle it ships to the U.S.”
Sales of autos exported from Japan rose 13.7 percent in the first half of 2007 over the same period last year, an increase of 135,498 autos. Meanwhile, sales of U.S.-built autos by Japanese manufacturers increased only 2 percent. And while Japanese exports to the U.S. are soaring, sales of autos in Japan have hit a 30-year low, dropping 10.5 percent during the first half of 2007 from a year earlier to 1,788,440 units, according to the Japan Automobile Dealers Association.
“With today’s artificially weak yen, Japanese automakers are boosting plant capacity back home even as domestic auto sales in Japan continue to bottom out. But patience in the U.S. with Japan’s mercantilist approach to solving its economic problems is wearing thin. With numerous bills addressing the need to respond and remedy the damages caused by unfair currency misalignments now introduced in the U.S. Congress, the message is clear that action is coming.”
