Export-Import Bank of Japan Turns Down GM and Chrysler Bids for Loans

08/29/96

Nikkei English News has reported that the Export-Import Bank of Japan has rejected applications for low-interest loans from General Motors and Chrysler. The carmakers sought the loans to build facilities to produce vehicles for export to Japan.

GM and Chrysler submitted applications under a program geared toward promoting Japanese imports of manufactured goods and lowering Japan's trade surplus. That surplus is now lower, however, and the government-affiliated bank has decided to cut the program's planned lending back by 50%. It will likely reduce funding again next year, the officials explained.

The program provides low-interest loans to foreign manufacturers who will make products for the Japanese market. The bank also lends working capital. Export-Import Bank loans have previously been given to U.S. automakers to convert vehicles to right-hand drive models. The rejected application constituted GM's second loan request and Chrysler's first. GM's first request was approved in Fiscal 1994.

Paul Dever -- The Auto Channel