The Exodus From Japan Begins In Earnest

Bertel Schmitt
by Bertel Schmitt

It looks like Carlos Ghosn is tired of talking about the inaction of the Japanese government with regards to the killer yen. He told his people to start packing. The Nikkei [sub] reports today that Nissan will stop making in Japan newly developed cars for export from Japan. New cars will be produced at overseas plants.

“Under current foreign exchange rates, there can be no shipments from Japan of totally new projects,” Nissan’s COO Toshiyuki Shiga said. According to the report, anything with a new chassis that is intended for foreign markets will begin its life in those foreign markets. Says The Nikkei:

“Shiga’s comments suggest that there are few benefits to producing entirely new models for export in Japan because of the yen’s surge, but new models that use the chassis of existing vehicles can be exported as they are relatively less expensive to produce.”

Nissan makes only 25 percent of its worldwide volume in Japan. However, half of the Japanese production is currently exported. This will change.

In the interview, Shiga indicated that exports from Japan could fall to 400,000 units. At the same time, the Japanese market (which pays in yen) is supposed to absorb 600,000 units, so that the target of 1 million units can be maintained. In the fiscal year that ended in March 2011, Nissan’s Japanese production was 1.07 million units, of which 610,000 were exported and 460,000 were sold in Japan.

In early November, Toyota had announced a similar plan to maintain its commitment to make 3 million cars in Japan: Fewer cars exported means that Japanese will have to buy more cars domestically.

If the domestic sales don’t pan out as planned, both carmakers can say: “Sorry, we tried.”

Nissan’s plan sounds more decisive than Toyota’s. Usually, cars are developed and made at home first before they slowly filter abroad. Starting newly developed cars offshore inevitably will mean that R&D has to follow. Development and production must go hand in hand in close vicinity, at least in the early stages of the cycle.

Japan’s innovative power will be dismantled and shipped abroad. And that is a much bigger loss than a few cars. Japan will slowly turn into a 3rd world country. It used to be that those got the older cars, while new models hatched at home.

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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  • John Horner John Horner on Dec 04, 2011

    Anecdotally, I'm told by an acquaintance who helps Japanese ex-patriots relocate to the US that there are quite a large number of people leaving Japan and picking up cheap-for-them property on California's West Coast.

  • GS650G GS650G on Dec 05, 2011

    I hate to say it but Japan is going through many of the same changes we have here.

  • 1995 SC Man it isn't even the weekend yet
  • ToolGuy Is the idle high? How many codes are behind the check engine light? How many millions to address the traction issue? What's the little triangular warning lamp about?
  • Ajla Using an EV for going to landfill or parking at the bad shopping mall or taking a trip to Sex Cauldron. Then the legacy engines get saved for the driving I want to do. 🤔
  • SaulTigh Unless we start building nuclear plants and beefing up the grid, this drive to electrification (and not just cars) will be the destruction of modern society. I hope you love rolling blackouts like the US was some third world failed state. You don't support 8 billion people on this planet without abundant and relatively cheap energy.So no, I don't want an electric car, even if it's cheap.
  • 3-On-The-Tree Lou_BCone of many cars I sold when I got commissioned into the army. 1964 Dodge D100 with slant six and 3 on the tree, 1973 Plymouth Duster with slant six, 1974 dodge dart custom with a 318. 1990 Bronco 5.0 which was our snowboard rig for Wa state and Whistler/Blackcomb BC. Now :my trail rigs are a 1985 Toyota FJ60 Land cruiser and 86 Suzuki Samurai.
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