Visions of $100,000 price tags on $50,000 Japanese luxury cars are pulling more Southern California shoppers into dealer showrooms to jockey for position ahead of threatened federal trade sanctions against 13 popular models.
A few dealers, such as Steve Shuken of Vista Lexus in Woodland Hills, said sales shot up from two a day to five on Wednesday and that the tariff threat is driving the action. But many other dealers haven't seen the growing groups of potential customers buying more cars yet.
"People are coming in to ask what we think will be happening," said Frank D'Agostino, general manager of Campbell Mazda in Costa Mesa. "They want some inside information, but mostly they still aren't ready to jump just because prices might go up."
The uncertainty has the entire Japanese luxury car industry on edge. Trade negotiators could still break the stalemate with a new agreement that opens the Japanese market to U.S. cars and auto parts. Or the fledgling World Trade Organization could rule on Japan's petition that the retaliatory 100% tariff proposed by the Clinton Administration is too tough.
"Everything is up in the air," Shuken complained. "It's like the O.J. trial. There's a new spin on it every day."
Not all dealers who sell targeted cars are furious. Preston Han, manager of Hollywood Mazda, said he is sympathetic to the Administration's position.
"I know they want to open up trade," Han said. "I think we should be able to send [cars] there and let the Japanese people decide themselves if they want to buy it. If they don't want it, they won't buy it. The Japanese people are making a lot of money over here, and I think that should go both ways."
But most dealers are like Mike Sullivan, owner of Santa Monica Lexus. "In Southern California we have earthquakes, fires, floods and riots," he said. "I used to say that all we need now is locusts. Sure enough, Mickey Kantor is my locust."
Kantor, the U.S. trade representative negotiating auto sales quotas with the Japanese, is the Administration official who announced the new tariffs Tuesday. Barring a negotiating breakthrough, he said, the sanctions would be imposed June 28 and made retroactive to cars that arrive in the United States after midnight tonight.
Top officials of the five Japanese car importers that would be affected by the tariffs--all headquartered in Los Angeles and Orange counties--have said they don't believe the final result will be as punishing a sanction as the 100% duty Kantor announced.
But in the meantime the companies are mounting lobbying campaigns aimed at pointing out their sizable U.S. employment and the impact on the economy here.
Importers would love to stockpile the models that could be hit by the sanctions, if only they could figure out how to make the huge cargo transports that ply the Pacific move faster. It takes 10 to 14 days for a ship crammed with 3,000 to 4,000 autos to cross the Pacific. "We can't get out there and row the ships any faster," said Nancy Hubbell, a spokeswoman for Toyota Motor Sales USA in Torrance.
Toyota Motor has about 3,000 Lexus models at sea--all slated to arrive after Saturday's deadline and, thus, subject to the punitive duty.
The 13 luxury models from Toyota, Honda, Nissan, Mitsubishi and Mazda on the government's hit list accounted for $5.9 billion in sales last year. The importers maintain that, if the tariff is imposed and prices double, there will be no sales next year and hundreds of luxury dealerships could close, throwing thousands of sales and service employees out of work.
While the political debate rages, the ships keep coming: Mazda has three on the way, Nissan and Toyota have about a dozen each and Mitsubishi has one in transit. American Honda Motor Co. in Torrance, the U.S. arm for Honda sales, won't disclose how many cars are en route.
None of the Japanese auto carriers are due at the ports of Los Angeles and Long Beach before Saturday's deadline, according to Capt. Richard McKenna of the Marine Exchange, which publishes daily lists of ship arrivals and departures. Spokesmen for the five companies said they did not know of any scheduled to dock anywhere else in the United States before midnight tonight.
But at least two ships already near shore will be unloaded before Saturday, though that will add only about 1,200 targeted luxury cars to the roughly 52,000 already in the country.
Both Toyota and Nissan had weekend landings scheduled at the port of Newark, N.J., and have diverted the ships to Jacksonville, Fla., to unload them before Saturday. That will put about 1,000 Lexus and 200 Infiniti models on the ground before the deadline.