Following strong rhetoric of Japan’s automakers against the strong yen, Nissan appears to take action. According to Reuters, Nissan will “reduce exports by as much as a third and reduce the impact of the yen’s crippling strength.” The move is couched into socially acceptable terms.
According to the Reuters report, Nissan does not want to reduce its Japanese production level. The company repeatedly had committed to producing 1 million cars in Japan. Reuters quotes Nissan’s Executive Vice President Hiroto Saikawa who said that the plan is to sell more cars in Japan. By increasing sales in Japan and building more vehicles for other brands under OEM agreements, “Nissan aims to boost production of vehicles sold locally in Japan from 460,000 vehicles last year to 600,000,” the report says. This would reduce exported vehicles to 40 percent, down from 670,957 units or 59 percent last year. It also would increase Nissan’s bottom line. With the yen trading at 80 to the dollar or below, exporting cars from Japan means incurring losses.
Nissan’s global production number was nearly 4 million in 2010. Only a quarter of this was made in Japan. Nissan had likewise indicated in the past that most or all of its future volume growth would go on account of locations outside of Japan.
Disclaimer: There is no official announcement by Nissan to this effect. Although Sunday is now a normal working day in the Japanese auto industry, I was unable to reach anyone at Nissan to receive independent confirmation. Emails have been sent. However, the report is by Ran Kim, an extremely reliable and conscientious Reuters correspondent.