Japan Rejects Detroit 3 Criticisms of 'Cash for Clunkers' Program

Washington - The Japanese government has rejected criticism that its $3.7 billion "cash for clunkers" program unfairly excludes Detroit's Big Three automakers, reported The Detroit News.

Satoshi Miura, a consular official in the Japanese Embassy in Washington who handles auto issues, said U.S. manufacturers could participate if they followed the same import rules as many others. Instead, U.S. companies opt to use a set of rules that doesn't require the same emissions testing.

"The short answer is Japan believes that our program is fair," Miura said today. "We have our 'cash for clunkers' program, but this is not only about stimulus but also for environmental policy.

"Any car can enjoy this program as long as they satisfy the same fuel efficiency standards, regardless if it is domestic or imported." Miura said 43 percent of imported vehicles qualify for the program in Japan.

In a letter to the deputy U.S. trade representative Thursday, General Motors Co., Ford Motor Co. and Chrysler Group LLC called the program "another example of Japan continuing efforts to discriminate against imported vehicles."

The program makes "the vast majority of imports ineligible for the program's significant tax cut benefit, regardless of the vehicle's fuel efficiency," the letter said.

Japan is providing up to a ¥250,000 ($2,830) tax cut for scrapping a car 13 years old or older toward the purchase of a new vehicle as long as it meets the 2010 fuel efficiency requirements and a ¥100,000 ($1,130) incentive for new vehicle purchasers who do not scrap a vehicle.

Under Japan's program, no U.S. vehicles are eligible because of special import rules; 87 percent of Japanese-built vehicles are eligible. But the Japanese government noted that program is voluntary, and U.S. manufacturers can qualify if they use the same import guidelines that other companies use.

Domestic automakers have long railed over what they call unfair hurdles to selling vehicles in Japan and have been trying to get more access to the market. It's unclear how much a favorable change would boost U.S. exports to Japan.