Nissan And Toyota: Sayonara Japan, We're Going To America

Bertel Schmitt
by Bertel Schmitt

Both Akio Toyoda and Carlos Ghosn are in the U.S. and what are they doing here? They complain loudly about the high yen. Akio Toyoda uses an interesting reasoning. It may make Americans wish for an even higher yen. Toyota may shift a “significant” amount of production to the U.S., if the yen stays high, and if demand in Japan will fail to consume Toyota’s vast capacity there. If the majority of Toyota’s output is shipped overseas, then factories will follow.

“If demand in Japan recovers, we will continue and work to maintain production of 3 million units” in Japan, Akio Toyoda said to Bloomberg. “If most of it becomes exports, shifting a significant amount of production to the U.S. may be considered.”

“If the yen continues to stay strong, Toyota will collapse,” Toyoda said at an opening event for a factory in Blue Springs, Mississippi. He reiterated comments he had made recently at a JAMA press conference in Tokyo, where Toyoda said that Japan’s automobile industry may no just hollow out, but “collapse” unless the yen goes back to more palatable levels. Toyoda usually is not prone to grandiose rhetoric, and when he says „collapse“, then he means it.

At the same time, Nissan & Renault co-CEO Carlos Ghosn said yesterday at the sidelines of an event of the Japan Society in New York City: “What’s taking place now is many projects are now basing their manufacturing outside of Japan because they just cannot survive with this 77 yen to the dollar.” Says The Nikkei [sub]:

“Ghosn called the rate of 77 yen per dollar “unbearable” and said many Japanese companies are shifting their operations overseas because they do not see any clear prospects for an end to their predicament. Ghosn criticized the government for lacking effective measures to fight the yen’s record appreciation at “the worst time for the Japanese economy,” citing the March 11 earthquake and severe floods in Thailand.”

Since 2007, the dollar has fallen more than 35 percent against the yen, a currency which some dimwits who had not updated their dog-eared talking points, steadfastly call overpriced and manipulated by the Japanese government.

Listening to Ghosn’s comments, people may remember that he had mentioned building a new entry-premium Infiniti using a Mercedes platform – somewhere. It could be Europe, China, the U.S. or elsewhere ( maybe Mexico), but definitely not Japan. Additionally, Financial Times Germany floated rumors of a joint Daimler/Nissan engine plant in the U.S. Infiniti will buy two diesel and one V6-gasoline engine from Daimler, beginning in 2013, but Daimler’s European capacities are tapped out.

Bottom line: The high yen will most likely not help the Detroit 3 as much as it will create jobs on U.S. soil. And that’s where a high yen comes in handy: A yen that buys 35 percent more in dollars makes such an investment 35 percent cheaper.


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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  • Pch101 Pch101 on Nov 18, 2011

    It would be nice if some of those of you who comment here would figure out that a company's contribution to the American economy is not tied strictly to the ZIP code of its headquarters. It would be really convenient if life was that simple, I know. But it isn't.

  • Xpistns Xpistns on Nov 19, 2011

    Go easy there, Vanilla. I once had a conversation with some "patriotic" co-workers complaining about profits going back to Japan even though my Accord was built by my fellow Americans and her Chevy Aveo was built in Korea. Given this, it's difficult to choose where to put your money--but we should NOT buy anything simply because it's American. That's like a mother giving her drug-addict son more money while begging him to stop. Doing so would only prevent us from becoming better at building better, competitive products. Isn't that how a "free" economy works? My mom raised us by herself working two jobs and only buys American cars but it was so painful to see her get gouged by the Plymouth dealer to replace the Mitsubishi engine twice in her first gen Voyager. I know it hurts, but the domestics will need to continue to care more about me and my family to get my hard earned dollars.

  • FreedMike Off topic, but folks, this site is not working well for me from a technical standpoint, and it doesn't matter if I'm using my phone, or my computer (on two different browsers). It locks up and makes it impossible to type anything in after a certain point. Anyone else having these issues?
  • Syke Kinda liked the '57, hated the '58. Then again, I hated the entire '58 GM line except for the Chevrolet. Which I liked better than the '57's. Still remember dad's '58 Impala hardtop, in the silver blue that was used as the main advertising color.
  • Dartdude The bottom line is that in the new America coming the elites don't want you and me to own cars. They are going to make building cars so expensive that the will only be for the very rich and connected. You will eat bugs and ride the bus and live in a 500sq-ft. apartment and like it. HUD wants to quit giving federal for any development for single family homes and don't be surprised that FHA aren't going to give loans for single family homes in the very near future.
  • Ravenuer The rear view of the Eldo coupe makes it look fat!
  • FreedMike This is before Cadillac styling went full scale nutty...and not particularly attractive, in my opinion.
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