Japan's continuing surge of auto exports has prompted sharply contrasting responses from the two sides of the Pacific Ocean.
The American auto industry and U.S. trade officials have warned Japan that the export rise could help fuel renewed trade friction with Washington.
Tokyo insists the export rise is temporary and is caused by strong demand in overseas markets.
Japan's vehicle exports jumped 28.8 percent in May to 346,532, the Japan Automobile Manufacturers Association reported last week. It was the 12th straight month of year-on-year gains.
Andrew Card, president of the American Automobile Manufacturers Association, said the Japanese export figures and contrasting numbers for Big 3 sales in Japan show the trade imbalance in autos is growing.
'The first five months of 1997 compared to the first five months of 1996 show our exports to Japan down 11 percent. But we know that the problem is only going to get worse because the excessively weak yen's effect takes some time to work through the pipeline,' Card said.
CRITICISM FOR JAPAN
At the Summit of Eight in Denver early last week, Trade Representative Charlene Barshefsky also chided the Japanese for not buying more U.S. parts and for the inability of the Big 3 to sign up dealers in Japan.
President Clinton raised similar issues when Prime Minister Ryutaro Hashimoto visited Wash- ington in April.
But Japanese Minister of International Trade and Industry Shinji Sato has called the rise in Japan's trade surplus a 'temporary phenomenon.' He said that an increase in Japan's national consumption, or sales, tax in April had dampened domestic demand, thus leading manufacturers to turn to export markets.
In dollar terms, Japanese exports of vehicles and parts in May rose 8 percent to $6.15 billion.
Vehicle exports to the United States rose 13.1 percent to 89,586. That rise was restrained by a 0.1 percent dip in U.S.-bound exports by industry leader Toyota Motor Corp.
'Although it is 'product starved' in the United States, Toyota restrained U.S.-bound exports for political reasons,' said Edward Brogan, Tokyo-based analyst for Salomon Brothers.
In contrast, Honda Motor Co.'s shipments to America soared 92.1 percent in May. Honda's business plan for the fiscal year to next March 31 calls for U.S.-bound exports to rise 30 percent to 240,000, mainly due to the CR-V, he said.
HOW LONG IS TEMPORARY?
Exports rose to all major markets, not just North America. Exports to Europe, for example, rose 39.1 percent to 92,527. A 71.4 percent rise in shipments to Germany, to 20,635, paced the gain.
Japan's overall trade surplus with the United States jumped 93 percent in May to about ¥323 billion, or about $2.8 billion.
Sato had the same explanation for Japan's rising surplus a month earlier. He has not said how long he expects the 'temporary' rise to last.
For the June-August quarter, Salomon Brothers' Brogan predicted Japan's total exports will rise by just over 20 percent compared to the year-ago period. He said growth will be more difficult to achieve in the second half of 1997 because of comparisons with a strong year-ago term.
Separately, Yoshifumi Tsuji, chairman of the Japan Automobile Manufacturers Association, said earlier this month that increasing exports to compensate when domestic sales are off is 'a common business practice.'
'It is not anyone's business to tell us not to increase our exports,' he said.