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Amid Talks, Chrysler Says it Will Buy $100M Japanese Dealership

By David Holley
Los Angeles Times

As U.S. and Japanese negotiators argued over foreign access to Japan's auto market, Chrysler Corp. announced Tuesday it will spend $100 million to buy control of a dealer network here in a bid to boost its Japanese sales nearly eightfold by 1999.

Chrysler's move will make it the first U.S. auto company with majority ownership of a dealership chain in Japan.

Chrysler will buy control of Seibu Motor Sales Co. Ltd., which currently has 118 directly owned or contracted showrooms that sell Chrysler vehicles and European cars. The move will help it boost annual sales to 100,000 by the turn of the century, Chrysler said.

A key U.S. demand in the contentious auto talks now under way in Geneva is that Japan make it easier for Japanese dealers to carry foreign cars. Tokyo, while expressing willingness to take some steps in this direction, has primarily responded that Detroit's Big Three automakers need to try harder to build their own dealerships in Japan.

"This is an important deal," said David Cole, executive director of the University of Michigan's Office for the Study of Automotive Transportation. "It says they will be more aggressive in trying to sell vehicles in Japan."

Chrysler's action Tuesday should help defuse some of the criticism aimed at Detroit, although the automaker said it has been working on the deal for a year and that the timing of the announcement, though "auspicious," was coincidental.

Washington has threatened to impose $5.9 billion in tariffs on 13 models of Japanese luxury cars if an agreement is not reached by Wednesday.

Root, general manager of Chrysler's Asia Pacific operations, told a Tokyo news conference. "This $100 million-plus investment is a clear commitment that Chrysler is serious about the Japanese market."