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Trade Sanctions Threat Won’t Change Plans to Sell Cars In Japan

June 2, 1995

NASHVILLE, Tenn. (AP) _ The prospect of automotive trade sanctions won’t affect Saturn Corp. plans to sell cars in Japan, the company says.

Originally conceived by parent General Motors Corp. as America’s answer to Japanese imports, Saturn intends to start selling cars at dealerships in Japan by the end of the decade.

The cars will be distributed by Japan’s Yanase company and sold by independent dealers, spokesman Bill Betts said Friday. The right-hand-drive cars, built to conform with Japanese driving practices, will be produced at GM’s Saturn plant in Spring Hill, Tenn.

Saturn’s intended entry into Japan is part of a broader GM strategy to make the car a globally recognized vehicle akin to its Adam Opel line made and sold in Europe. The company wants Japanese consumers to see Saturns as competitive alternatives to their own cars.

But Japan’s exclusionary business practices and government regulations make it extremely difficult for many outsiders to sell products there, particularly cars. Other U.S. automakers have enjoyed only limited success in the Japanese market.

That is a primary reason why the United States has threatened punitive tariffs that would double the prices of nearly $6 billion of Japan’s most popular luxury autos in this country.

Talks aimed at making Japan buy more American automotive products collapsed next month and aren’t expected to resume until shortly before June 28, the deadline for the sanctions to take effect.

The threat of sanctions will have no effect on Saturn’s plans to sell cars in Japan, Betts said.

``They weren’t affected when we first announced it, and we don’t expect to be affected now,″ Betts said.

Saturn said in 1991 it wanted to eventually sell cars with steering wheels on the right side in Japan. Betts said Friday that Saturn plans to do that by the end of the decade.

Trade sanctions and Saturn’s plans are not tied to each other, said Joseph Phillippi, auto analyst for Lehman Brothers Inc. in New York.

``For the people who would be affected, I can only hope it would be resolved. But it seems as though positions have really hardened,″ Phillippi said.

``It would be interesting to see how the common man reacts to all this in Japan. You may get a provincial or nationalist attitude there.″

Saturn has sold cars in Taiwan since 1992 as a test overseas market.

The move into Japan comes as the company plans to expand production of its successful Saturn compact-car line. Analysts estimate less than 300,000 Saturns have been made each year since its launch in 1990.

On Thursday, Saturn President Richard L. LeFauve said the company is looking into different options to increase production and expand sales overseas.

``This is very, very good news for us,″ said Tsukasa Uemura, press officer for the Japanese Embassy.

Big Three automakers should build cars that fit the needs and tastes of Japanese drivers _ right-hand drive and 2 liter or smaller engines, Uemura said.

``It’s highly probable the United States is going to resort to the final measures like imposing sanctions on Japanese luxury cars exported to the United States. But at this moment we still have hope ... that we could solve this problem,″ Uemura said.

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