One by one, Japanese automakers are turning their back on Nippon and establish production in low cost countries. Can’t blame them: The high yen makes exports prohibitively expensive. On the other hand, a higher and higher yen buys more and more production capacity abroad. Nissan has been on the forefront of this movement, maybe because its CEO isn’t Japanese. Now, Nissan bolsters its presence in Indonesia.
We often forget that Indonesia is a very populous country, with a population of 240m, if the CIA Factbook has its facts together. Indonesia also has favorable government policies that make the country attractive for exports, said Toru Hasegawa, an executive in charge of Nissan’s Asian operations outside of Japan and China. “We need to be thinking about the next step of Nissan’s globalization. Indonesia has a very high quality work force and very low labor costs,” Hasegawa said. And for domestic consumption, Nissan may benefit from a proposed lower tax for fuel-efficient cars. What more do you need?
So Nissan is investing a paltry $20 million into their plant in Indonesia to double the capacity in the country to 100,000 vehicles a year by 2013, writes the Jakarta Globe.
Like Nissan, Toyota is shifting output to other countries, particularly emerging markets. The plan is to cut production capacity in Japan by about 20 percent within five years. Soon, that Japanese import will come from anywhere but Japan.