Japanese carmakers are watching the rising yen and falling dollar with great trepidation. Most have the yen at 80 or above in their plans. Today, the greenback buys just 77 yen. “The soaring yen is forcing major Japanese companies to rethink their assumed exchange rates for the current fiscal year,” writes The Nikkei [sub] today, and adds: “Reviews of assumed rates could also accelerate the transfer of production bases overseas.” Honda does just that.
Honda will produce its Fit subcompact in Mexico when a new car plant is finished in 2014, writes The Nikkei [sub]. The car is currently being made in Honda’s Suzuka factory in Mie Prefecture, Japan. At current exchange rates, Honda makes next to no money on the car.
The plant will have an initial annual capacity of 100,000 units. This comes in addition to an existing plant with an annual capacity of 50,000 units. The capacity can be increased down the road.