U.S. Auto Parts Associations Testify in Japan In Support of Further Deregulation
10 February 1998
U.S. Auto Parts Associations Testify in Japan In Support of Further Deregulation
WASHINGTON, Feb. 10 -- Four U.S. associations representing
all segments of the American automotive parts and accessories industry
submitted testimony this week in Tokyo that the Japanese Ministry of Transport
(MOT) should modernize its technician certification regulations to accelerate
deregulation of the over-regulated Japanese automotive repair industry. Ed
Phillips, Director of the U.S. Automotive Parts Industry Office in Japan,
testified on behalf of the four associations. The MOT hearing was organized
in response to a September 1997 petition filed by the U.S. associations.
Under the 1995 U.S.-Japan Framework Agreement, MOT took the positive step
of amending its garage regulations to allow automotive service companies the
option of being certified as specialists involved in designated types of
safety-related repairs (e.g., brake service), as an alternative to operating a
full-service certified garage. This action recognized the increasing
complexity and cost of motor vehicle repairs and the international market
trend, in response, toward specialization in certain areas of motor vehicle
service. However, MOT has failed to modify its technician
testing/certification regulations in the same manner, and this inaction has
impeded implementation of its prior garage deregulation measure. The U.S.
industry petition was filed to correct this situation.
At the hearing, U.S. associations also urged MOT to consult fully with
U.S. industry about other pending and all future regulatory initiatives that
could affect foreign parts manufacturers' market access in Japan, including a
proposed expansion of Japan's motor vehicle recall and type approval systems.
Christopher Bates, Vice President, International Operations for the Motor &
Equipment Manufacturers Association (MEMA), said, "U.S. industry is very
concerned about new MOT proposals to expand parts certification and recall
authority, which have the potential to become new non-tariff barriers, and
about the lack of transparency in Japanese regulatory procedures which hinders
U.S. efforts to affect Japanese policy."
The U.S. associations -- MEMA, plus the Automotive Parts and Accessories
Association (APAA), Automotive Service Industry Association (ASIA), and
Specialty Equipment Market Association (SEMA) -- have pushed for deregulation
of Japan's automotive repair industry since the U.S.-Japan negotiations on the
1995 Framework Agreement. The U.S. objective is to promote more competition in
Japan by changing MOT's inflexible certified garage, vehicle inspection, and
technician certification regulations that have limited the ability of garages
to specialize or make other changes in their repair business to address
consumer needs. Such deregulation will improve market access in Japan for all
new entrants, including foreign automotive suppliers.
Lee Kadrich, Vice President, Government Affairs and Trade for APAA, noted
that "Japan's automotive service industry is responding to MOT's deregulation
program in the positive way that we and others anticipated: Competition is
increasing in Japan's automotive aftermarket to the benefit of Japanese
consumers." APAA, ASIA, MEMA and SEMA have enjoyed consistent support from the
highest levels of the U.S. government for this major deregulation effort in
Japan and for implementation of all other aspects of the 1995 Framework
Agreement.
Tyler Wilson, Government Affairs Director for ASIA, added, "We have made a
compelling case to MOT that it should align its automotive technician
testing/certification programs with changes in its certified garage
regulations." In accordance with the Framework Agreement, last year MOT
created a new category of authorized service business -- "specialized
certified garages" -- to make it easier for Japanese companies to adjust their
facilities, personnel, equipment, and business strategies to changing market
conditions.
Linda Spencer, SEMA's Government Relations Director, highlighted the fact
that "this hearing sets a clear precedent for expanded consultations between
the Japanese government and affected international parties on matters of
regulatory policy. SEMA, like our affiliated U.S. automotive associations,
believes responsible, progressive deregulation of Japan's automotive
aftermarket industry is only possible through such a constructive, ongoing
dialogue."
Phillips summarized the U.S. associations' views, stating, "We hope MOT
will move promptly to expand certification options available to Japanese
automotive technicians as we are proposing today, and will remain open to
other deregulation measures we have suggested." The four associations
petitioned MOT last year for removal of brake parts from coverage under the
agency's list of critical safety parts and systems that must be repaired or
replaced in certified or specialized certified garages. In 1995-96, MOT
removed shock absorbers and seven other parts from this list, most of which
have a low repair frequency.
Phillips concluded, "Our proposals offer opportunities to enhance motor
vehicle safety by making repair services more cost-effective, faster, and
consumer-friendly -- in short, more accessible to Japanese citizens. Clearly,
Japanese industry leaders have seen this trend coming and are investing to
take full advantage of it."
With deregulation, U.S. suppliers of high-quality, competitive automotive
products -- including safety-related replacement parts, general service items,
and accessories -- see new opportunities to participate on equal terms in
Japan, the worlds second largest aftermarket.
In their testimony, U.S. associations again acknowledged progress being
made in deregulation of Japan's garage sector and voiced appreciation for the
efforts of MOT, MITI, the Japan External Trade Organization (JETRO), and
others in Japan to achieve the goals of the Framework Agreement. The
associations, with Japanese and U.S. government assistance, have already
organized, and in the future will organize additional U.S. industry business
missions to Japan to expand U.S. company participation in Japanese trade
shows, and to boost Japanese buyer participation in major U.S. trade events,
such as Automotive Aftermarket Industry Week (held each November in Las Vegas,
Nev.).
The Automotive Parts and Accessories Association is based in Bethesda,
Md.; the Automotive Service Industry Association is based in Elk Grove
Village, Ill.; the Motor & Equipment Manufacturers Association is
headquartered in Research Triangle Park, N.C. and the Specialty Equipment
Market Association is headquartered in Diamond Bar, Calif.
SOURCE Motor & Equipment Manufacturers Association