TOKYO — Japan's massive buildup of auto production facilities in the United States may force auto makers here to cut their annual exports to the American market by 1 million cars or more in the early 1990s, the president of the Long Term Credit Bank of Japan predicts.
The bank president, Mamoru Sakai, says that when Japanese-owned plants in North America achieve a total production capacity of more than 2.2 million units a year, "a little after 1990," that will "cause a large decrease in exports from Japan."
"More than half of the current exports (2.3 million cars a year) could be affected," he says. "Something like a 1-million-car reduction could occur in production in Japan. It will have a great impact."
No Decreases Planned Yet
Sakai, talking with foreign correspondents last week, acknowledged that Japanese firms are saying that they will not decrease exports from Japan as a result of their American investments. But, he added, "that's what they're saying now."
Takashi Ishihara, chairman of both Nissan Motor Co. and the Japan Committee for Economic Development, a major business group, said that it's too soon to know what will happen in 1990, when Japanese production capability in North America tops the 2-million-unit mark.
But he, too, acknowledged that "there may come a time when the 2.3 million cars we are now exporting to the United States will be cut by about half."
"To believe that Japanese will enjoy 100% success in their production in North America and that cars produced by American makers will decline by the amount produced by Japanese factories there, is a bit too optimistic," Ishihara said at the Japan National Press Club.
Nomura Research Institute, Japan's premier think tank, also in Quiet Tradinghas predicted that Japanese auto makers will cut exports to the United States when the North American assembly plants of eight Japanese firms go into full operation. In 1990, capacity of those plants is scheduled to be 2,010,000 units.
The Long Term Credit Bank, according to Takashi Kiuchi, its senior economist, expects the North American production capacity to rise to 2,230,000 units in 1991. He said there will be an additional factory, capable of turning out 220,000 units a year, which has not yet been announced.
Nomura forecast a less drastic reduction of exports from Japan in 1990--a cutback of 400,000 cars from the present 2.3-million level, according to Toyomizu Tamao, the institute's research department manager.
Actual production at Japanese-owned factories in North America, Tamao said, is expected to be between 1.5 million and 1.6 million passenger cars in 1990, with exports of 1.9 million cars from Japan in that year, for a total of at least 3.4 million in potential sales.
Last year Japan produced 465,637 cars in the United States and brought in 2.3 million from Japan. In 1986, exports of passenger cars and auto parts were valued at nearly $30 billion, accounting for more than half of the total U.S. trade deficit of $58.6 billion with Japan.
A reduction of car exports, however, will not reduce U.S.-Japan friction in the automotive industry, Sakai said.
Pointing to new investments in the United States by Japanese auto parts makers, Sakai said that Japanese auto assembly plants "are now being welcomed because they create new jobs, but once they are established there will be discontent and dissatisfaction over the fact that the parts they are using are made by companies that came from Japan."
Already the U.S. government has raised the issue of trade in auto parts as one of five industrial sectors targeted for intensive government negotiations.
Sakai foresees a bleak future for the auto industry in Japan.
"Until (the yen's steep appreciation), the auto firms made large profits on their exports," he said, "while they made very little profit on their sales at home. With a reduction in exports, not only will profits go down but operating ratios will fall, causing a further decline in profit."
Already, he said, auto makers have suffered a 40% decline in profits in the past year.
"As a result, it is possible to imagine that the issue of re-amalgamation of the industry will come up in the future," Sakai said. He added, however, that he foresees no move to merge any of Japan's 11 auto firms within the next five years.
Japanese auto makers exported 4.57 million passenger cars around the world last year, an increase of 3.3% over 1985, but registered a decline in overall exports caused by sagging truck sales. Global vehicle exports fell 1.9% to 6.64 million units, or 53.9% of total production. PRODUCTION BUILDUP
Scheduled production capacity of Japanese-owned, or partially owned, factories in North America by 1990:
CARS Honda 360,000 Honda Canada 80,000 Toyota-GM 250,000 Toyota Canada 50,000 Toyota U.S. 200,000 Nissan 150,000 Mazda 300,000 Mitsubishi-Chrysler 200,000 Fuji-Isuzu (Subaru cars) 60,000 Suzuki-GM (Canada) 200,000 Total 1,850,000 TRUCKS Nissan 100,000 Fuji-Isuzu (Isuzu) 60,000 Total 160,000 North America Total 2,010,000 Exports * 2,300,000 Overall Total 4,310,000
* Current Japanese government quota on exports of passenger cars to the United States.