By on November 24, 2011

The slow exodus from Japan continues. Driven out by the strong yen, which turns exports into a money loser, Toyota is building out capacities abroad. Toyota will invest €265 million ($354 million) into its existing plants in Turkey and the UK. 1,900 new jobs will be created, 400 in Turkey, 1,500 in the UK.

According to the plan,production of the C-segment hatchback Auris will be concentrated version of its European-produced C-segment vehicles (petrol, diesel and hybrid) will be consolidated at their Burnaston plant (TMUK) in Derbyshire. Currently, the Auris is produced both in Turkey and the UK.

Toyota Motor Manufacturing Turkey (TMMT) in Sakarya, will not lose work, in the contrary. Along the Toyota Verso, the plant will build a new, unnamed compact sedan.

This change of production strategy is set to take place within the next two years.

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12 Comments on “Toyota Flees Strong Yen, Shifts Production To Europe...”


  • avatar
    mike978

    Were European Auris’s produced in Japan and exported to Europe?

    • 0 avatar
      alluster

      @Mike – The Auris’s sold in Europe were made in UK, Turkey and Japan. Toyota is expanding the UK plant to consolidate all Auris production in one location. A new sedan based of the Auris will be built in Turkey to replace the Corolla. Toyota is increasing EU capacity and production thus reducing future exports from Japan.

  • avatar
    alluster

    This shows how severe the effects of a strong yen are if Toyota is increasing production in a country with very high wages (compared to third world nations where Toyota could have easily setup new plants instead).

    The Yen’s rise against the dollar/euro is peanuts compared to how much it has risen against other currencies, especially critical emerging markets with huge growth potential, like China, India, Russia, Brazil, S Africa and Thailand. Toyota exports a large number of cars, kits, parts, components to these countries. Will not be able to compete in these markets, especially when GM and VW are launching a massive onslaught.

    For the last 6 month, then Yen has gone up as follows against

    S Africa 32.10%
    Russia 27.78%
    Brazil 22.96%
    India 21.08%
    Thailand 14.50%
    Indonesia 14.41%
    Australia 13.50%
    canada 12.50%
    Euro 12.24%
    CHF 10.42%
    Pound 8.94%
    China 8.52%
    USD 6.12%

    • 0 avatar
      minneapolis_lakers

      Japan needs to continue intervening in the FX market to devalue the yen to the range of 100 JPY/USD– they need to do what Switzerland did, i.e. draw a line in the sand and crush the speculators.

    • 0 avatar
      damikco

      Japan wages are higher than the UAW’s

      • 0 avatar
        Volt 230

        So they should move here to the free to work Southern states but because of the UAW trying to get their filthy paws in those transplants already here, they’re scaring the crap out of any more investments over here by foreign makes, instead theu’re going to Mexico and China, thanks UAW!!!

  • avatar
    daveainchina

    I find it odd that Japan hasn’t devalued it’s currency. Something is going on here, I’m not sure we are getting the full story on this.

    Something doesn’t make sense to me.

    • 0 avatar
      th009

      There is no such thing as “devaluing a currency” once you allow the exchange rates to float freely.

      • 0 avatar
        Sinistermisterman

        Yes there is. There are a few tools that central banks/governments can use to devalue their own currency. Quantitative easing is one, buying up foreign currency in bulk is another. Another is to do what the Canadian finance minister does every time the value of the loonie gets too high – announce to the world that “This current exchange rate will hurt the economy.” Bingo, the value of the loonie goes down. Admittedly these options don’t always have a massive effect, but to suggest that a country is totally powerless once is currency is out on the free market is incorrect.

    • 0 avatar
      minneapolis_lakers

      I think it’s probably political — if Tokyo really let the yen fall rapidly, Washington is not going to be happy.

  • avatar
    carbiz

    Didn’t the Diet just spend $56B DOLLARS last year to prop up the yen? Oh, that’s right – that was before the earthquake.

    I’m no economist (thank God!), but the hundreds of billions that are being spent to repair and upgrade after the earthquake/tsunami must be having an affect on the Japanese economy. The big multinationals must see the writing on the wall and are getting out of dodge while they still can.


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