Magazine article Marketing

Using the Japanese as a Battering Ram

Magazine article Marketing

Using the Japanese as a Battering Ram

Article excerpt

The Monopolies and Mergers Commission has a way of confounding everyone's expectations and this time it's no different.

A verdict that UK car prices are obscenely high in relation to its EC cousins and should be cut straight away was widely anticipated. It didn't happen. Car manufacturers were praying for a "they were right all along" conclusion. That didn't happen either. What no-one expected was such a big come-on to the Japanese. And tht did happen.

The MMC didn't come up with much (see box). It concedes that UK car prices are high. But, it said, "international comparisons (of price) are complex" and, moreover, there are "no significant differences" in the general price levels of two of the UK's most similar European markets, France and Germany.

The Government came up with even less. It sat on the report for a month and then kicked it into touch by giving interested parties three months to comment.

Some say that's because significant changes to company car taxation were planned for the budget anyway. Others say it's because election policy paralysis at work.

Short-term then, it's a damp squib. Long term it could be a time-bomb -- or an even damper squib.

At a time when Peugeot head Jacques Calvert makes speeches about Nissan's Sunderland plant being a Japanese aircraft carrier off the coast of Europe -- the backdoor route to an invasion of the Continent -- the MMC declares that unrestricted Japanese car sales in the UK are essential for allowing the market to find its own level.

The eccentric Gentlemen's Agreement which restricts Japanese carmakers to an 11% share of the UK market should be scrapped, the report concluded.

Trade and Industry secretary Peter Lilley has fanned the flames by declaring: "The Government will be considering, in the light of the MMC report, whether the UK should move to an unrestricted market before 1999". …

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