The United States and the international community need to pressure Japan over the value of the yen.
General Motors Corp., Ford Motor Co. and Chrysler LLC said the weakened yen has given companies such as Toyota Motor Corp., Nissan Motor Co., and Honda Motor Co. subsidies of $4,000 (2,806 EUR) to $12,000 (8,419 EUR) in profit per vehicle at a time when Japan's home automobile market has been sluggish.
"To me, there's absolutely no doubt that Japan has been managing its currency," said Mustafa Mohatarem, GM's chief economist, citing estimates the yen is undervalued by 20 to 25 percent. "It's a fiction to believe that Japan's currency in any respects reflects market conditions."
To address Japan, the automakers said the International Monetary Fund should act upon new principles announced earlier this year to monitor, assess and report on member exchange-rate policies.
Broadening their argument, the Detroit officials said the misalignment of Japan's currency could also create disruptions for financial markets. Their remarks followed meetings in Washington of the World Bank and the IMF, where the head of the IMF said the global economy faces a period of uncertainty.
The Bush administration has said the Japanese government has not intervened to influence the value of its currency since 2004.
William C. Duncan, general director of the Washington office of the Japan Automobile Manufacturers Association, declined to comment on the Japanese government's exchange-rate policy. But he said about two-thirds of the vehicles sold by Japanese automakers in the U.S. "are produced in North America and are not significantly affected by currency fluctuations."
Domestic automakers counter that the U.S. has been a profitable market for Japanese companies at a time when sales on their home turf have been stagnant. Ellen Hughes-Cromwick, Ford's chief economist, said Japan was expected to export an estimated 2.2 million vehicles in 2007, or about twice as many vehicles as in 1996.
"It has helped to prop up their crumbling home market, where auto sales have been falling rather consistently for more than three years," she said.
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