• Oct 19th 2010 at 6:01PM
  • 17
Toyota President Akio Toyoda caused something of an uproar in the automaker's home market of Japan when he suggested that "logically, it doesn't make sense to manufacture in Japan." Why? The surging value of the Yen, currently at a 15-year high, compared to the U.S. Dollar.

Considering that the vast majority of vehicles Toyota builds in Japan are intended for export and that the American market is still the automaker's most important, the value of the Yen is a major stumbling block standing in the way of profits. Still, Toyoda has confirmed that his eponymous company has no intention of entirely halting production in Japan.

What that assurance doesn't mean, however, is that Toyota won't continue to shift production overseas in an effort to retain profitability. While none of the Japanese plants will be completely closed, they may see a good portion of their output transferred to facilities in other markets... notably North America.

[Source: Just-Auto]


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    • 1 Second Ago
  • 17 Comments
      • 4 Years Ago
      This is exactly as I've said for years. Labour and building the car is not a sign of profit or investment in an economy -- it is a sign that you are the cheapest place to have it done.

      Profits go to where the companies are headquartered (pay taxes). Ford and GM and Chrysler (at least for the forseeable future) have their corporate infrastructure here.

      It is the old Coca Cola .. they produce all over the planet and those countries certainly are glad to get the jobs and factories .. but the main benefit always went to the US to essentially feed off the lower cost to produce locally in those markets.

      Domestic car companies have an enormous impact on the North American standard of living .. they suck the profit to here. The foreign companies want -- just like Coca Cola -- to make people feel they are here for them; but that harsh reality is that they are sucking our standard of living back to the home countries.

      I know Toyota and Honda people -- and Hyundai/Kia etc -- will say how wonderful it is that the are "made" here; but that is the least important factor. Production moves to the lowest tier on the economic growth expectation curve -- they are just 3rd worlding us and Toyota even had plans to adjust to our falling standard of living by offering cheaper versions of their products here.

      My opinion anyway.
      • 4 Years Ago
      I am willing to pay more for stuff that I know are made in Japan. I know the words 'Made in Japan' will guarantee that I will receive a product with some level of quality. I just wish more electronics are still made in japan.
      • 4 Years Ago
      Before you jump over the fence and go El Norte amigos, you my want to wait for Toyota to start building a multitude of factories in Mexico. Twenty pesos a day and in 90 or so years you can buy a Corrola to haul your Corona.
      • 4 Years Ago
      Anyone who had "fears that he's closing all Japanese factories" is extremely dense.
        • 4 Years Ago
        yeah it's extremely dense to assume he would act 'logically', him being a japanese corporate leader and all. which is why it probably caused an uproar, admitting it like that he's not acting very japanese - saying that they're stupid if they keep doing this and then keep doing it(and by logic they should end up in bankruptcy).
      • 4 Years Ago
      I think they should bring the Crown Athlete over.
        • 4 Years Ago
        The Avalon's FWD. The Crown's RWD.
        • 4 Years Ago
        Well if they bring the Crown it'll replace the Avalon.
        • 4 Years Ago
        Never mind the Crown Athlete. Bring the regular Crown and Crown Hybrid over as well. Then replace the Camry with the Mark X and the Corolla with the Allion, perhaps the Matrix with the Blade. Compete with the Sonata wagon with the Mark X Zio and the Estima to compete against the Mazda5. Engineer the Hiace and Liteace to pass NA safety standards and introduce both as commercial vehicles. Introduce the Alphard/Vellfire and the Crown Majesta under Lexus.

        That's how you properly revitalize Toyota.
      • 4 Years Ago
      The real reason Toyota wants to move production out of Japan and possibly to North American is because of Hyundai and Kia. They are coming fast behind Japan's Big Three (Toyota, Honda and Nissan) after demolishing Mitsubishi and Suzuki (Mazda would have been stronger if Hyundai/Kia weren't stealing its sales).

      Korea has an advantage of a weaker currency, the Won, relative to the Yen. Add the fact that Hyundai and Kia are cranking out much better cars than before and the Koreans want to do to Japan what Japan did to Detroit.

      Additionally, Hyundai and Kia are expanding production in North America. I would not be surprised if they begin building assembly plants in Mexico too. Toyota (and Honda, Nissan) will no longer be able to export from Japan small cars and compete with the Koreans and even a resurgent GM and Ford (poor Chrysler is too busy peddling crappy Sebrings as the 200).
        • 4 Years Ago
        to Shane from Australia:

        I agree that currency valuations go in cycles but the long-term ramifications of Hyundai and Kia expanding production in North America and even Mercedes which will begin assembling C-Class cars in Alabama, will force the Japanese to move more production to North America.
        • 4 Years Ago
        You must think long term ... the yen may be strong today but weaker in the future while the Korean currency may be weak today but stronger in the future. Every currency bar none goes up and down through time. The yen is no different. For the first time in many, many years - the Australian dollar is now equal to the US dollar ... remarkable. But, eventually it will go down.
      • 4 Years Ago
      Toyota president, Akio Toyoda, addressed the company's U.S. dealers at an annual conference in Las Vegas and his vision for the automaker came through loud and clear: he intends to run a company that dominates the electric-drive segment. In this case, domination includes adding a host of cutting-edge technology vehicles to the company's already-green model lineup. Toyoda talked about the company's recent struggles, full of recalls and reliability concerns, but he also spoke of a promising future, one made brighter by the introduction of new electric-drive models. Toyoda told conference-goers that the automaker:

      Source: http://green.autoblog.com/2010/10/12/toyota-president-we-are-determined-to-lead-the-electric-drive-s/

      http://www.monstertruckinc.com/toyota_trucks.php
      • 4 Years Ago
      surging value of yen? well its back to depreciating it another 421161510x
      • 4 Years Ago
      Oh Please... Earning a $25/hour + benefits job at a Subaru or Hyundai factory means being "third worlded"?

      And BTW, if you're so worried about profits going to Japan or elsewhere, you can always buy foreign company stock.

      • 4 Years Ago
      Even if they shift over more production over, Japan builds about 2X more cars than the US builds*. Japan is a manufacturing powerhouse (which of course is one of the biggest reasons their standard of living is as high as it is).
      The Yen might be slowing that down and hurting exporting profits for Japanese companies, but I see them resolving that issue eventually.

      *note: I did not mention trucks, I specifically wrote cars, and I also am separating Canadian and Mexican car production. Still though, for a country with a population of quite a bit less than 1/2 that of the US, it should be humbling to know just how much stuff is made there.
      • 4 Years Ago
      Bring more jobs to U.S.

      This is not bad for america.
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