Here is one more piece of piece of evidence that we are seeing countries break from their promise as they pursue domestic economic agendas. Of course it is okay for a country to help out their own, but this is a blatant foul. Someone should call a penalty on Japan for this move.
There is no doubt, this is protectionism at its best (worst). Now we will need to keep on the watch as to what the U.S. response will be.
What are your thoughts? Should we levy additional taxes on Japanese cars?
Japan’s version of a “cash for clunkers” program designed to spur automobile sales discriminates against imported vehicles, Ford Motor Co. (NYSE:F), General Motors Co. and Chrysler Group LLC said today. Japan’s effort “overwhelmingly benefits the purchase of domestic vehicles over imported ones by making the vast majority of imports ineligible for the program’s significant tax cut benefit,” the auto companies wrote in a letter to the U.S. Trade Representative’s office today.
If I am reading this correctly, it flies in the face of what actually occurred with the U.S. version of the program. A total of over $2 billion was doled out by the U.S. taxpayer and the following were the top cars sold through the program. (color coded – Orange is Foreign, Green is Domestic manufacturers)
1. Toyota (NYSE:TM) Corolla
2. Honda (NYSE:HMC) Civic
3. Ford Focus
4. Toyota Camry
5. Hyundai (OTCPK:HYMLF) Elantra
6. Toyota Prius
7. Nissan (OTCPK:NSANY) Versa
8. Ford Escape FWD
9. Honda Fit
10. Honda CR-V AWD
Disclosure: Horowitz & Company clients may hold positions of securities mentioned as of the date published.