Threat from the East

By matching the lines and curves of Western auto designs--often at lower prices--Japanese carmakers provided an eye-catching, purse-opening display at this year's round of European auto shows. Visitors to the Paris Auto Salon were entranced by the Toyota GT, which was James Bond's set of wheels in You Only Live Twice. And at the London show last week, crowds around Honda's mini-size line of cars were so dense that most of the curious visitors could not even get close enough to kick the tires.

European auto manufacturers view the Japanese products as a market threat--with good reason. Honda, for example, expects to sell 12,000 of its cars within twelve months. In France during the first nine months of this year, 2,307 Japanese cars were sold, compared with 182 for all of 1966. As in Britain, Honda is making a big splash, and has already taken 7,000 orders for its mini-series for delivery next year. And in Belgium, Toyota's Corolla, Crown and Corona models trebled last year's sales of 1,000 in the first nine months of 1967.

Vital Issue. Most vocal in criticizing the autos from the East is British Motor Corporation. In January, Honda entered the British market with the 5800 sports car selling for $250 less than B.M.C.'s MGB. Now it will offer the N-360, an air-cooled two-cylinder car that even with extras sells for $140 less than B.M.C.'s comparable minimodel.

B.M.C., which claims that the Japanese cars are poorly trimmed and underpowered, has fought Honda's efforts to establish a dealership network. Says Lester Suffield, B.M.C.'s deputy managing director in charge of sales: "Of course we are getting tough. It has taken us 50 years to build up our sales network, and we don't intend to give one inch on this vital issue." Especially grating is the fact that the little Japanese cars coming into Britain pay a 22% duty, while mini-size cars entering Japan pay 40%.

Moving Slowly. For their own part, Japanese manufacturers insist that they have been circumspect in approaching the European and British markets. Says Masahiko Zaitsu, European export manager of Nissan Motors, Japan's second biggest company: "Unlike in the U.S., we don't look for any sudden increase in exports. We have to move slowly in order not to irritate these countries and disrupt their auto industries." While Japan's sales to Britain and Europe were up 70% during the first six months of this year, in absolute figures this only amounted to 24,117 cars. By contrast, B.M.C. sold 20,000 minis alone during the first four days of this year's auto show. But mindful of the Japanese catalogue of successes that includes radios, cameras, motorcycles and shipbuilding, European and British manufacturers are girding themselves for stiff competition from the East.

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