Trade panel probing Japan automakers U.S. firms say Japan is dumping illegally underpriced minivans.

July 11, 1991|By Knight-Ridder

WASHINGTON -- In an initial victory for the nation's Big Three automakers, the government's International Trade Commission has ruled that the sale of Japanese minivans in the United States may be unfairly damaging the American auto industry.

Yesterday's 3-0 decision, while not final, supports the accusation by General Motors Corp., Ford Motor Co. and Chrysler Corp. that Japanese firms are dumping illegally underpriced minivans in the United States to steal a larger share of the lucrative van market.

Minivans, especially higher-priced models, are a major profit source for American firms, which have lost billions of dollars in recentmonths because of declining passenger car sales. While the Big Three dominate the U.S. minivan market, Japanese sales have grown from 4 percent to 12 percent since 1988.

Yesterday's vote only addresses the possible damage to the U.S. industry.

The Commerce Department will rule next on the second part of the dumping case -- whether the Japanese vehicles are priced below their production cost.

Unless both rulings are made at preliminary and final stages, the government cannot impose additional duties on Japanese minivans.

A final decision is months away, and that can be appealed in court.

In the ruling, commissioners said they were persuaded to continue the federal investigation of minivans by statistics showing that sales of U.S.-built vans are dropping while Japanese sales are growing.

"This is clearly not an unnecessary petition," said Commissioner Don Newquist, who called Japanese minivan sales growth "disturbing . . . As has often been the case, imports hit the 'high-end' of a market, which translates into not only fewer domestic sales but lower profit margins on sales made by domestic minivan producers."

Commissioner Seeley Lodwick agreed, saying he is concerned that unfair Japanese competition may hinder Big Three efforts to make new minivan models.

On May 31, U.S. automakers accused Mazda, Toyota, Nissan and Mitsubishi of dumping or planning to dump minivans in the United States at below-value prices.

The Japanese firms deny any dumping and say Americans are buying more imported minivans because they are better-made and have newer designs.

The import companies were disappointed yesterday, blaming the ruling on a quick preliminary investigation "without time for a complete review of the facts."

"We are confident that our position will be vindicated," said a statement from Mazda, which sells the MPV minivan in the United States.

In contrast, Thomas Hanna, president of the Motor Vehicle Manufacturers Association trade group in the United States, said GM, Ford and Chrysler were pleased: "By any standard economic indicator, the industry was suffering injury," Hanna said, "and these companies were convinced that these unfair trade practices were causing the injury."

The Commerce Department is expected to rule by Nov. 7 on its preliminary investigation of Japanese minivan prices.

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