Infiniti moving production out of Japan to counter strong yen

Being a global automaker means having to deal with the rising and falling tides of currency. The climate is particularly difficult in Japan, where the yen is valued at record levels compared to the American dollar. Since a giant chunk of Japanese automotive exports are shipped off to America, that means greatly diminished profits.

As of the end of 2011, Infiniti, Nissan's in-house luxury marque, doesn't build any vehicles outside of it home country of Japan, though the QX full-size SUV was built in the United States for a time. That's all about to change, however, starting with the Infiniti JX crossover that's slated for production in early 2012 in Smyrna, Tennessee.

Soon, more models will be built outside of Japan. "As cars come up for renewal, generally they're being relocated in a function of where the majority of sales are," said Andy Palmer, executive vice president of Infiniti, speaking to Automotive News. We'd guess, then, that the upcoming small hatchback from Infiniti, which is said to be inspired by the Etherea Concept, will be built in Europe.

Even models that continue to be assembled in Japan – important, says Palmer, because, "Part of the myth of Infiniti is Japanese craftsmanship..." – will feature more parts imported from outside the country. Currently, Infiniti averages about 15 percent imported parts content for vehicles assembled in Japan, but the automaker is targeting a new goal of 65 percent "non-yen" content.

If production outside Japan goes well, expect the trend of Japanese brands building more and more vehicles beyond its borders to continue as automakers look to bolster profits in the face of a strong yen. "Somebody in this industry has got to demonstrate that you can make luxury outside of Germany and Japan successfully over time," concludes Palmer. We're guessing he doesn't mean Cadillac...

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