Washington, DC — The Auto Trade Policy Council (ATPC), whose members
include Daimler Chrysler, Ford and General Motors, called on G7 finance ministers to
use the opportunity of their April 13 meeting in Washington, DC to address the
artificially weak yen. Japan's weak yen policy has forced U.S. automakers to contend
with an average $4,000 subsidy on vehicles that its Japanese competitors export from
Japan to the U.S.
"There is a growing consensus around the world that Japan must take action to
allow the yen to regain its true value," said Stephen J. Collins, President of the ATPC. "The U.S. government should join European finance ministers in insisting on a serious
discussion with the government of Japan on a definitive plan and timetable to realign the
yen to a level that represents its true economic value."
Between 2000 and 2004, the Japanese government intervened in currency markets
to weaken the yen, spending more than $400 billion, and has engaged in public
'jawboning' since then to ensure the yen remains low. A recent Peterson Institute for
International Economics study estimates the yen to be 25-30% undervalued. The
resulting 'yen subsidy’ has facilitated a Japanese auto manufacturing resurgence; in 2006,
more than half of all vehicles made in Japan were designated for export, exceeding fifty
percent for the first time in 19 years.
"The weak yen heavily subsidizes Japanese auto exports," continued Collins."The proof is clear: As sales of new cars has dropped sharply and steadily in Japan for
almost two years, Japan’s auto companies have been adding capacity to their Japan-based
facilities to export even more vehicles to the U.S. Last year, almost half of all Toyotas
sold in the U.S. were actually built in Japan, and Honda is planning to open its first new
Japanese plant in 30 years."
Senator Debbie Stabenow (D-MI) recently introduced the Japan Currency
Manipulation Act, S.1021, which directs the Department of Treasury to work with the
government of Japan to design a plan to draw down Japan's excessive levels of currency
reserves, thus facilitating the proper realignment of the yen to the dollar.
The Automotive Trade Policy Council, Inc. (ATPC) is a Washington, DC — based
non profit trade association that represents the common international economic, trade
and investment interests of its member companies: DaimlerChrysler Corporation, Ford
Motor Company and General Motors Corporation
