Honda Fit. Hecho En Mexico

Bertel Schmitt
by Bertel Schmitt

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.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • PenguinBoy PenguinBoy on Jul 31, 2011

    Another advantage to Mexico is reduced shipping cost when selling into the USDM. A few years back this wasn't a big consideration, but as energy costs rise it will be. Reduced shipping time also means less inventory tied up in transit, and increased agility to better respond to rapid changes in market demand. I expect the hollowing out of Japan's economy to continue, it's hard to see why they would build anything for export except for low volume high margin niche products.

    • Sam P Sam P on Jul 31, 2011

      Non car related, but Nikon makes all its digital SLR cameras under $2000 in a plant in Thailand. Only the really high end cameras from $2500-7000 (D3x, D3s, D700) are still made in Japan. Canon still produces all its digital SLRs in Japan but I predict that will change in the near future.

  • Speedlaw Speedlaw on Jul 31, 2011

    Interesting. Honda builds the mdx in canada, but the pilot in the us. Still other cars in mexico. Mx is less regulation but other issues, security and infrastructure. US and CA have roads and utilities, and you don't have to hire your own army. CA has higher taxes but you are free of health care and retirement problems. Which is best ? I'm ignoring the political considerations.

    • Stuki Stuki on Jul 31, 2011

      In general, if you can afford it, the more countries you have plants and experience working in; the less likely you are to be stuck in a country if it's regulatory regime should get too confiscatory, or become otherwise untenable.

  • Obbop Obbop on Jul 31, 2011

    My sub-par memory of Young Coot days stabs a few neurons with an electro-chemical jolt that brings forth a memory, a niggling recall of receiving 220 Yen for every one of the one-dollar USA bills I handed to the ship's disbursing officer. Did that make me rich at the time? Was I wandering Tokyo's Ginza district a wealthy Coot? I wonder if the quality of edible discards into Japanese-style dumpsters meets, equals or exceeds the tossed-away edibles I fear a growing percentage/number of USA residents currently or in the future rely upon to stave off starvation. Just a Curious Coot.

  • Geozinger Geozinger on Aug 01, 2011

    I wonder if the people who normally disparage the USDM automakers for importing product north will do the same for Honda now, too?

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