Global News: Japan's Automakers Lobby Aid; Ford Hikes Prices in the U.K.; Europe-Korea Trade Opens Up
March 24, 2009
In Global News Tuesday, Japan's automakers are lobbying for government aid, Ford is raising prices in the United Kingdom to contend with the weakening pound, and Europe and South Korea struck a tentative deal to encourage free-flowing trade.
Japan's flailing auto industry is lobbying aid from a government that has been hesitant to offer direct aid to automakers. The Japan Automobile Manufacturers Association (JAMA) proposed a tax incentive, similar to that of France and Germany, in which consumers are paid to scrap older, less fuel-efficient vehicles. The Japanese are wary from protectionist backlashes in trade during the 1980s and 1990s, but that caution may lift as the recession presses on.
Japanese auto sales for February declined 32 percent, year-over-year, while global production for Japanese automakers plummeted 50 percent. This week JAMA forecast an 8- percent decline in auto sales, trucks, and buses, for the 2009 fiscal year beginning on April 1.
In the United Kingdom, Ford is raising prices an average of 3.75 percent on all vehicles to cope with the weakened British pound. The price hike, effective April 1, follows a 4.7 percent increase on February 2.
"Raising prices in such difficult times may seem counter- intuitive, but as a U.K. business with so many of our costs priced in euros, we have no choice if we are to protect jobs and remain viable," Nigel Sharp, Ford's managing director in Britain, said in the statement.
South Korea and the European Union and have inked a tentative agreement to scuttle tariffs and encourage free-flowing trade. While many details are still in contention, trade ministers are scheduled to vote on the agreement at a Group of 20 meeting in London on April 2.
The agreement, which promotes anti-protectionism, is a major boon for South Korea's export-reliant economy and may also intensify pressure on U.S. lawmakers to complete a similar deal. The United States is renegotiating a Bush era free-trade pact with South Korea that Congress has resisted since 2007, objecting to provisions that too heavily favor Korean automakers.
Korea's export-reliant economy and may also intensify pressure on U.S. lawmakers to complete a similar deal. The United States is renegotiating a Bush era free-trade pact with South Korea that Congress has resisted since 2007, objecting to provisions that too heavily favor Korean automakers.
Photo by Ford
Ford Mondeo in the U.K.
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