Protectionism or Politics - The Truth Behind Japan's Cash For Clunkers Program

Based on this info, Japan looks fair to me.

When we translate the bleating of the US auto-makers into plain English, we hear: "Yous guys make better stuff den us, and we're pissed cuz you don't buy our junk."

An ad on this very page proclaims a Pontiac G3Wave for just $13,778 with 0% financing. If you want "cheap," Yugos, Skodas, and the Big Three are your shopping ground. If you want "good," look elsewhere.

Let the flames begin :-)

Hey! Skoda makes pretty good cars these days. They also make very nice trams and trains:)

fair and waiting for those agents to post who still think it's about protectionism

I think it's protectionism when the Japanese government pays for the tests for the Japanese companies. Just like they payed for the development of the Prius.

wow, sorry my bad. paid*

This is an interesting comment. While Toyota and Japan deny this rumor, a former Toyota exec "blew the whistle" on this practice. In all fairness, I *do* believe that Japan's auto market has some protectionist aspects. There are definitely some under-the-table deals going on between Toyota, Honda, and the Japanese government.

Having said that, is Japan's market any more protectionist than our own? The U.S. still has the "chicken tax," a 25% tariff on imported pickups, blocking truck imports from Mahindra, VW, Great Wall, and others. U.S. emissions standards - especially in California - are draconian and difficult to certify. I think that regulations and national pride often conspire to promote protectionism.

However, this is an example of a bad call by the domestics. Japan's Cash for Clunkers program isn't about blocking U.S. automakers from selling cars.

If you think carefully, the Japanese govt wouldnt try and shaft Honda, Nissan, Subaru , Mitsubishi, Mazda, Suzuki, Kawasaki and Yamaha by subsidizing Toyota.
what the Japanese govt has done , is tax fuel highly and push for lower dependance of foriegn oil imports. Why ? , because they are highly dependant on the volatile middle East for their needs and dont have the necessary Military muscle to ensure a stable source .."cough cough" like Saudi Arabia , Kuwait UAE is for the US.
This is a common story throughout Asia and Europe, a rising China too is pushing for cars with smaller engines and hybrid systems to have a smaller dependance on Oil resources.
Politically and strategically the shift is on to remove any long term dependance on the middle East oil supplies. The current slump has made everybody forget the run up in energy supply prices. The economy will bounce back and so will the prices. The transition is Hybrid..till the future electric infrastructure is put in place.

Look around the world ... car makers are teaming up to ensure that they have the resources to compete in that world. VW tie with Suzuki, Mitsubishi possible tie up with Citroen PSA. In all possibility BMW will tie up with MB for sharing hybrid knowhow .

Why wouldn't the Japanese government subsidize Japanese companies? I am lost. I'm not saying Toyota is the only one accepting government handouts.

But Honda has been the biggest loser in the Hybrid wars. It has invested in Hybrids for a longer time then Toyota.

Don't forget that GM laughed at Toyota saying $20 billion investment will never have a payback. Everybody was on the fence whether the gamble would payoff for Toyota .. and it has. To simply blame the lack of foresight on GM's part on the supposed Japanese govt involvement is simply shrugging of responsibility to unsubstantiated FUD from Detroit.

Has Toyota made $20 billion in profit on their Prius's already? Assuming a laughable 20% profit on the prius, that would amount to 4.4 million prius's sold. And I know for a fact that when the Prius came out it was still losing money on every prius sold, my guess is Toyota will need to sell 10-15 million prius's before they finally get their 20 billion back and start making money on the venture.

China holds the vast majority of the USA's debt, no one will complain about them for fear that they hold the USA by the nads.

They don't need to start a war. All they need to do is stop handing the USA money and the economy will collapse. All of a sudden people will realize just how over speculated the dollar is and you have a very scary situation.

Did you know the average person in China saves 50% of their wage? If I remember correctly, the USA still has a negative savings rate.

Protectionism!

upwards..
you are retarded blinded by prejeudice.. we can forgive you !

@Impls

I find it very remarkable that you gathered your opinion of me as being "prejudice" and "retarded" from me posting one word.

This speaks volumes and volumes of your self pity and bad judgement.

huu76, I don't think you realize that the usa is not the only market in the world. Products made in China are sold in every country in the world including their own. With three times the population China is finally becoming the worlds largest consumer, surpassing the USA. You are deceiving yourself into a very false sense of security if you think that China is something you can sweep under the rug. Face it, they are both bigger and richer than the USA.

Great nations fall, it wasn't too long ago that the UK was the most powerful country in the world. Now look at where it is today.

LOL so where has UK fallen? It is one of the most powerful countries in the world, with one of the highest quality of life and developed economy. It's not an empire anymore, but the quality of life for the average citizen has not fallen anywhere since the empire fell apart. quality of life has increased, which is the only thing that matters in 21st century. Dumb countries like Russia still believe that power means how many people you can kill. Those days are long over.

All the previous empires before were big because of energy. The UK was the world leader in coal, the roman empire was based around food and crops. When the roman empire overused its crops and couldn't yield food to support their people anymore they fell pretty much over night, when the energy focus shifted from coal to oil the UK started to decline along with the value of coal. What does the USA have? The USA is like the giant energy trading Enron, once people realize that just like Enron the bulk of the dollar is based purely on speculation the dollar will crumble. What does it take to realize this? Easy, China simply has to demand its money back, when the USA has to print more money off to pay their bills people will realize how little value it actually holds.

As far as China's sales in the USA, I disagree, China is surpassing the USA as a consumer and as such is not dependant on the USA like you so believe. Couple that with the fact that all the other countries in the world still buy Chinese crap and you realize how insignificant the USA really is. The one thing they had going for them was the raw amount of crap they purchased and now they aren't even the best at that anymore.

"I can't recall the company but some guy just invested a crap load of money into some Chinese investment company (new IPO) and wants everyone else to as well. Why? Because it'll increase the value of his stock and he'll make loads of profit from he sheep who follow."

I see a strange parallel between that guy and your defending of the states. Since the dollar is based on speculation people like you want, nay need people to believe it is stronger than it is.

Your comments that I don't respond to I have no opinion to, I'm simply arguing with one point made by you that China is of no concern. And by not responding to them I am keeping this argument from blowing up to include everything from hitler to nanotechnology.

China having just surpassed the USA as the largest automotive consumer contradicts your point that the average person in china can't afford anything of value. Sure overall the population may have a third the amount of new vehicles per person compared to the states, but they also have well over 3 times the population base.

You misinterpreted what I said about the USD and speculation. I did not mean that the USD is solely based on speculation, I meant due to speculation the USD is far far stronger than what it should be. The USA currently owes 12 trillion dollars, most of which is owed to the Chinese. That debt is immensely huge, you can buy every man woman and child in the USA a Lexus ES350 for that amount of debt.

A couple years ago when the oil prices went through the roof, was there a slow down in oil being produced or speed up in oil consumed? No, there was ample reserves of it. The reason why it got so high was since people started considering the stock market too risky, they started investing in physical things like gold and oil. This speculation is what drove the price of oil up. When people started realizing how much oil there actually was and how artificially inflated the prices were, oil plummeted. The same can be said for the American dollar. All china has to do is yank its chain around the USA's neck and the world comes crashing down.