TOLEDO, OH, October 4, 1996--Competition and cooperation between companies, rather than confrontation over numbers or expectations are the keys to continued success between Japanese automakers and U.S. parts suppliers, William C. Duncan, General Director, Japan Automobile Manufacturers Association (JAMA), Washington, said to an audience of Ohio parts makers today.

"There is a positive story to tell:

• U.S. exports of vehicles to Japan were up 26% this year, imports down 34%; Imports so far this year supply nearly 11% of Japan’s passenger car market and some 34% of Japan’s large car market. In 1995 import car registrations increased 31.2% in a market that grew 4.2%;
• JAMA members purchased over $21 billion of auto parts from U.S. suppliers in FY 95;
• In the first six months of 1996, U.S. auto parts exports to Japan increased 11%, while imports were down about 10%. Japan now imports more U.S. auto parts than any country in the world outside the NAFTA union with Canada and Mexico;
• Overall balance of trade with Japan has declined about $10 billion this year, nearly half due to automotive products.

None of this happened overnight. It happened as a result of a decade and a half of effort at the company-to-company, manufacturer-to-supplier level," Duncan said.

"While the current level of activity clearly demonstrates that relationships between the automotive industries of the U.S. and Japan are strong and enduring, I would caution against judging these relationships in terms of simplistic numerical measurements and arbitrary expectations. It is unrealistic to expect production and purchasing numbers to show the same steady geometric rates of increase as we have seen in the developmental years," Duncan stressed.

He added "while some of the companies have announced future expansion of production capacity in the U.S., this expansion is not as steady or dramatic as it was in the 1980s. Furthermore, the value of expanding engine, transmission and other in-house production would not be reflected in these purchasing numbers, at least not fully.

Certainly, with the maturity of localization, purchasing will be more vulnerable to fluctuations in the business cycle, and other market factors. The point here is that care must be taken in judging potential opportunities from gross purchasing numbers."

Duncan also pointed out opportunities exist in the Japanese market, if aggressively pursued. JAMA companies currently report purchases of more than $3 billion of auto parts and materials from the U.S. As sales of U.S. vehicles continue to rise in Japan, demand for replacement parts for those vehicles will grow.

Duncan added that, "Japanese manufacturers have developed a strong supply base of overseas suppliers dedicated to providing the consumer with the highest quality vehicles at the lowest price. The JAMA companies purchase parts under a concept known as "global best." This means strictly maintaining the highest standards in procurement decisions -- the highest quality, the best speed and flexibility of delivery, the most advanced development capability, the lowest cost, and a committed management focused on developing long-term cooperative relationships. Japanese automakers purchase parts based on these criteria regardless of the supplier’s nationality or country of origin."

Since 1980 Japanese vehicle manufacturers have invested more than $12 billion in plant, equipment, R&D facilities and design centers in the U.S. They employ 40,000 Americans and produce some 2.3 million units. Over 300,000 Americans are employed in 6,500 dealerships selling Japanese name brand vehicles. Japanese name brand vehicles still take about 23% of the U.S. market, yet import share has fallen well below the 1978 level. Through August 1996 import share of Japanese vehicles was only 7.4%.

JAMA is the national trade association for 13 Japanese manufacturers of motor vehicles, trucks and motorcycles. JAMA, which is headquartered in Tokyo, has offices in Washington and Brussels.

For more information, contact Charley Powers, (202) 452-1670--JAMA News Bureau