Import quota for Japanese cars raised 20%: New EC agreement expected to push UK prices down for all motor manufacturers

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The Independent Online
JAPANESE car imports into Britain are to be allowed to rise by 20 per cent this year to more than 200,000 in a move that could help force down prices of all manufacturers.

The increase, announced yesterday in Tokyo as part of an EC-wide agreement on Japanese car imports will allow Japanese-built models to take 12 per cent of the UK new car market.

Together with increased production at Japanese transplant factories in Britain and new EC rules requiring car makers to publish Community-wide price comparisons, this will exert downward pressure on prices.

Under the EC-Japan agreement, Japanese imports into the Community will fall by 9.4 per cent this year to 1.089 million. The agreement, reached after lengthy negotiations, is based on a predicted 6.5 per cent decline in the EC market this year though some manufacturers believe it could fall by up to 10 per cent.

Japanese imports into Germany, Belgium, the Netherlands and Ireland will presumably fall sharply. But their market share in the five member states that exercised quotas or voluntary restraints up until the end of last year will rise significantly. In France, Italy, Spain and Portugal the increase will be about 10 per cent, but imports into Britain, the only EC car market expected to rise this year, will increase from 168,375 in 1992 to 202,800.

These figures exclude the share of the market which will be captured by cars built at the UK plants of Nissan, Toyota and Honda, all classed as EC manufacturers.

A spokesman for Toyota GB said: 'I suspect that overall the Japanese will be very disappointed but for us in Britain this could be good news.' Toyota's UK sales between January and March were up by 46 per cent on the same period last year.

Nissan sold 74,000 cars last year of which 55,000 were imported from Japan. But this year it plans to sell about 50,000 Sunderland-built Primeras and Micras in Britain.

The Toyota plant in Burnaston near Derby, due to be officially opened in June by the Prince of Wales, will manufacture 9,000 Carina E cars for the UK market this year. In total Toyota expects to sell about 51,000 cars against 42,000 last year.

The increased British quota will be particularly valuable to manufacturers such as Mazda, Mitsubishi and Daihatsu that lack EC assembly plants. A Mazda spokesman said: 'This is quite good news.' A lot will depend, however, on how the Japanese decide to share out the quota among their car makers.

A Monopolies and Mergers Commission report into the UK car market last year identified the Voluntary Restraint Agreement governing Japanese imports as the main reason for UK cars being overpriced.

The MMC said that the agreement, which ended in December, restricted competition and gave the Japanese less incentive to cut prices or import cheaper models.

Imports into France will rise from 69,000 to 77,300, into Italy from 36,500 to 42,900, into Spain from 30,800 to 34,200 and into Portugal from 36,500 to 41,500.

(Photograph omitted)