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Europe worries Japanese cars now may flood its auto market

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When the United States and Japan concluded their deal to limit Japanese automobile shipments to the American market May 1, they ignited an outburst of concern throughout Europe.

The essence of the European declarations is that government officials and the auto industry are deeply worried about the possibility of Japanese auto exports being diverted to the European market unless Europe gets a similar agreement.

Despite a swift Japanese government declaration that its auto industry was being asked to show "moderation" in its exports to Europe, there is a near-panic about the consequences for the hard-pressed European car manufacturers. There is a widespread feeling that the only way Europe can obtain restraint from Japan is through a unified approach. But there is also suspicion some European automakers will break ranks and make their own deals with Japan.

As an example of this disunity, there were reports at the same time the US-Japanese accord was being announced that West Germany's Volkswagen was near a pact with Nissan for joint production of VW "Passat" cars in Japan for sale there.

"The warning for Europe is clear," noted the leading French daily, Le Monde; "it has become the preferred targed. It's hard to visualize Japan not trying to increase its automobile sales on the old continent to compensate for the limit in exports to the other side of the Atlantic."

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