Toyota Flees Strong Yen, Shifts Production To Europe

by Bertel Schmitt

Published: November 24th, 2011

toyota flees strong yen shifts production to europe

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.

#BertelSchmitt #Europe #Japan #Toyota #Turkey #UK

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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Daveainchina on Nov 24, 2011

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.

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- Th009 on Nov 24, 2011
  
  There is no such thing as "devaluing a currency" once you allow the exchange rates to float freely.
  
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- Sinistermisterman on Nov 24, 2011
  
  @th009 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.
  
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- Unhittable curveball on Nov 24, 2011
  
  I think it's probably political -- if Tokyo really let the yen fall rapidly, Washington is not going to be happy.
  
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- Sector 5 on Nov 25, 2011
  
  @unhittable curveball Well yeah specially since China's flashing its Navy might in the southern Japanese prefecture.. Washington answers with ANZUS
  
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Carbiz on Nov 25, 2011

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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