By on January 23, 2014

Toyota Baja California Assembly Line

As the yen weakened against the dollar for a second consecutive year, Honda, Nissan and Toyota all set production records in their North American plants in 2013, according to Automotive News.

Outputs for the trio last year include 1.86 million units for Toyota, 1.78 million for Honda, and 1.47 million for Nissan, though gains on the production line didn’t match sales in the United States. However, exports took up the slack in U.S. showrooms, with more units sent to growing markets such as South Korea, Saudi Arabia and Latin America.

As far as individual models are concerned, Honda built 466,695 Accords at their Marysville, Ohio plant in 2013, around 20,000 more than the number of Camrys Toyota workers at the automaker’s Georgetown, Ky. plant.

The Japanese Three expanded their presence in North America as insulation against a falling yen, which fell 17.6 percent against the dollar in 2013 after falling 11 percent in 2012, as well as protection from overseas production disruptions that could affect North American output. In fact, Honda will soon open a plant in Celaya, Mexico to build the Fit, with the long-awaited 2015 NSX to be assembled in an experimental plant in Marysville.

Regarding Hyundai and Kia, the two South Korean automakers set a few records of their own in North America, including 399,495 Sonatas and Elantras leaving Hyundai’s Montgomery, Ala. plant, and 105,647 Santa Fes rolling out of the Kia line in West Point, Ga.

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20 Comments on “Honda, Nissan, Toyota Set Production Record Against Weakening Yen...”


  • avatar
    dash riprock

    Just another example of the complexity behind making longer term decisions such as where to invest capital dollars. 2 1/2 years ago the Canadian dollar was at 1.06 to the US. Yesterday is dipped below 90 cents….on a vehicle with thin nominal margins, this represents a huge change positive or negative in unit profitability. Would keep me awake at nights if I was a CFO

    • 0 avatar
      highdesertcat

      “Would keep me awake at nights if I was a CFO”

      I’m sure it does for the CFOs of these manufacturers.

      But currently it still makes sense to maximize production in North America, at least until the UAW renews their efforts to ‘organize’ the labor of these non-union shops again, at which time it will be more advantageous to move the whole kit and caboodle to Mexico, Central and South America and exercise the provisions of NAFTA.

      • 0 avatar
        dash riprock

        Agreed…but I will add that the great crisis has changed the landscape in a much greater sense for Ford, GM, and, Chrysler. The two tiers and greatly altered benefits and work rules makes US and even Canada a good stable place to build

      • 0 avatar
        Kinosh

        I never really understood why people get on the labor costs for autoworkers. As long as you don’t have ridiculous provisions where you have to support 3x as many retirees as current employees, then the labor costs just are not significant.

        Direct labor is… 10% of the cost? 15% maybe? I’d rather just stay in the US and pay lower freight costs, pay lower travel costs (for the engineers who are CONSTANTLY flying around), and be done with it.

        I imagine that Japanese automakers could cut their employee pay to zero in Japan and it would only fix 25% of the exchange rate issue they are having.

        • 0 avatar
          highdesertcat

          ” labor costs just are not significant.”

          It is exactly that philosophy that currently drives the debate for higher minimum wages, although none of that debate applies to auto workers in the US.

          But it was also the reason that NAFTA was enacted — to build elsewhere, outside of the US, so that labor costs would not be an issue.

    • 0 avatar
      L'avventura

      One thing that is absolutely certain about the foreign exchange market is that it will fluctuate. The solution is simple….diversify.

      The hard lesson Japanese companies have learned over the last decade, as their currency skyrocketed is that they need to build more plants globally, and rely less on Japanese production.

      Which is what they did. Japanese automotive production is small compared to what it used to be, most of their factories are closer to the markets they plan on selling it. This shields them from high-currency fluctuations.

      Also by diversifying they can profit when one currency has a competitive advantage over another, by increasing production where currency is weak. The key is to have flexibility in manufacturing.

      The era of one country becoming a central export hub for the entire world is long dead.

      • 0 avatar
        highdesertcat

        Don’t forget the ginormous financial incentives the Japanese auto makers were offered by the Reagan administration and the states to entice them to set up production in the US and provide badly needed jobs for unskilled, unemployed Americans. Huge gain for America! Detroit and the UAW? Huge drain on America.

        However, that recruiting effort to get Toyondasan to build in America really galled the UAW since they were excluded in the deals. Hence their current-day efforts to get a slice of that lucrative pie.

        With Toyota again officially and soundly beating GM and VW for the top slot as the planet’s biggest automaker, you can be assured that Toyondasan will continue to ramp up their production efforts in the US in order to maximize their production capacity here, while at the same time increasing the export of their products from the US to foreign shores.

  • avatar
    DenverMike

    According to some people around here that shall remain nameless (BAFO, SPaM, etc), it’s the Chicken tax that has Japanese OEMs building trucks in the American south, including Tijuana.

    • 0 avatar
      RobertRyan

      True. I expect eventually more of the Big 3 will move South to the Southern US and Mexico.

      • 0 avatar
        sunridge place

        Move? Cool. Are they going to pack up their existing plants in a moving van and drive south looking for a cheap patch of land?

        Or, do you expect the US market will grow enough over the next few years for GM/Ford/Fiatsler to need more capacity and open new plants to meet future increases in demand?

        Do share your wisdom.

        • 0 avatar
          RobertRyan

          No the “transplants” might. I expect them to become a much larger percentage of the US vehicles available.

          • 0 avatar
            sunridge place

            Then why did you write that the ‘Big 3′ will be moving to southern states and/or Mexico?

          • 0 avatar
            RobertRyan

            No the “Big 3″ have already moved some production to Mexico. The “transplants” will open in other parts of the US.i.e Lexus or Mexico.

          • 0 avatar
            sunridge place

            Your quote:

            ‘True. I expect eventually more of the Big 3 will move South to the Southern US and Mexico’

            My bad….you said eventually…I thought you were trying to make a prediction.

            My definition of eventually must be different than yours.

  • avatar
    TW5

    This trend is 30 years overdue, since the Plaza Accord was signed in 1985. US-Japan will become better trade partners and allies when we agree to balance trade.

    The most important waypoint on the horizon is Toyota’s Prius plant in Mississippi. When it finally opens, auto imports and oil imports will both decline, and the US dollar will strengthen. Export-dependent economies will stabilize, and the race to the bottom will cease.

    • 0 avatar
      SpinnyD

      That plant has been open for two years now, they are building their second corolla model. The Prius plans were scrapped and there are no plans to put a Prius model on the line there as of yet.

      • 0 avatar
        TW5

        I meant when it begins Prius production.

        The plan to build Prius is delayed (again), not scrapped. Suppliers are causing a few headaches and Toyoda was roped into making some sort of volume pledge to his factories in Japan.

        Toyota can’t afford to lose the hypermile segment by getting sideways with US regulators and consumers. It will be built in the US sooner rather than later.

  • avatar
    Freddie

    “The Japanese Three expanded their presence in North America as insulation against a falling yen”

    I’m confused, wouldn’t a falling yen make exports from Japan cheaper?


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