Fighting for American Industrial Renewal; Industry and Manufacturing Advocacy Group for public Education

Cash-for-Clunkers, Japanese style.


You may have heard that Japanese government excluded US-made vehicles from its own recent “cash for clunkers” legislation. (And if you haven’t, we've a cut & pasted a brief sampling of headlines in the box at right.)

But what has been lacking in most of the coverage is how they were excluded. Well, is the place to come for deep-dive research, and we’d be letting you all down if we didn’t show how it was done!

First of all, you must understand that Japan has historically been a very closed market since the dawn of the industrial era. (Read that history here) Don’t buy into the old straw-dog arguments about most imported cars being unsuitable for the Japanese market. Last year, Korean manufacturers sold just 502 vehicles in the over 1-million unit Japanese market, prompting even fast-growing Hyundai to suspend sales. (Story)

However in today’s modern-era of “borderless” communication, they can no longer simply make a decree excluding imports, and hope to retain any credibility as a so-called open, democratic market.

So in classic “Shitashimiyasui” (friendly) fashion, the Japanese government does not burden rarely seen imported cars with the cost and red-tape of its own government mileage certification standards, deferring instead to the standards and figures used in the vehicle’s home market. The Japanese government insists that any vehicle qualifying for its cash-incentive program must meet a minimum mileage standard (equivalent to 35.5 MPG). Sounds fair so far… After all, the US cash-for-clunkers program required both a minimum mileage rating, AND an improvement from the trade-in vehicle.  

The problem is, the Japanese are accepting only their own mileage certifications, and those certifications vary wildly from the tougher US certifications! Perhaps the best-known example is the 83.5 mile/gallon Japanese mileage rating of the Toyota Prius, compared to the 46 mile/gallon rating by the US Environmental Protection Agency.

Now consider that the Toyota Sai (a slightly less luxurious version of the Lexus 250h) is rated at 54 MPG under the Japanese system, and just 35 by the US EPA; and it soon becomes quite obvious that a number of US-brand vehicles (beyond simply the hybrid Ford Fusion) would have made the cut under the Japanese rating system.

Surprised? We aren’t. Simply the latest twist in double-standards.