Get Your Japanese Import Now (While You Can Still Afford It)

Bertel Schmitt
by Bertel Schmitt

Sometimes, strength is a weakness. Especially in currencies. The still surging Yen makes Japanese Exports expensive and unprofitable. Despite a lot of talk from their elected officials that the Yen is too high, manufacturers are thinking it will go higher. This could significantly alter the export-heavy Japanese industrial landscape. Case in point. Suzuki and a plot of land.

Suzuki had a great idea: They wanted to go into the industrial park business. The plan was to buy 100 acres of land between Suzuki’s Sagara plant and the port of Omaezaki. That port is Suzuki’s major export hub. Space in the industrial park was to be sold or rented out to affiliated parts makers. Everything was supposed to be up and running in 2014. Did we mention before that the biggest beneficiaries of just-in-time development are real estate developers? No profit this time: The project has been scrapped. Suzuki is writing off $3m in surveying costs, and told parts manufacturers to continue making parts wherever they are.

According to the Nikkei, “the yen’s advance played a part in convincing the automaker to give up the project because exports will likely remain weak if the Japanese currency stays strong.”

Currencies work in wondrous ways: The U.S. has pressured China to give up their dollar peg. They did that to some degree. As a result, China doesn’t have to buy boatloads of dollars anymore to maintain the peg. Instead, they are going heavily into the Yen, because the Chinese also think it will go further up. Just by the mere fact of the Chinese buying into the Yen, the Yen continues to go up. Lower demand for dollars makes the dollar go down. It’s heading south as I type this. This makes US exports cheaper. That creates jobs if the U.S. still has something to export. It also makes imported goods more expensive. Not just Japanese cars. Everything at Walmart. Everything the U.S. imports en masse. This creates inflation: Everybody pays the price to bail out the economy.

PS: If some idiot still mentions that the Yen is being manipulated and way too low, please do me a personal favor: Sock him. If nobody is watching.

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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  • Mtypex Mtypex on Sep 02, 2010

    This just in ... the yen hit 10 per dollar ... but GM said it's still too low! The damn Japanese are manipulating the FX markets!!!!!!1!!!!11!!!!

  • Slumba Slumba on Sep 03, 2010

    Actually I have been considering buying a Ford for precisely that reason. If the yen continues to get stronger, replacement and service parts will rise significantly in price.

  • Lorenzo Are they calling it a K4? That's a mountain in the Himalayas! Stick with names!
  • MaintenanceCosts It's going to have to go downmarket a bit not to step on the Land Cruiser's toes.
  • Lorenzo Since EVs don't come in for oil changes, their owners don't have their tires rotated regularly, something the dealers would have done. That's the biggest reason they need to buy a new set of tires sooner, not that EVs wear out tires appreciably faster.
  • THX1136 Always liked the Mustang though I've never owned one. I remember my 13 yo self grabbing some Ford literature that Oct which included the brochure for the Mustang. Using my youthful imagination I traced the 'centerfold' photo of the car AND extending the roof line back to turn it into a small wagon version. At the time I thought it would be a cool variant to offer. What was I thinking?!
  • GregLocock That's a bodge, not a solution. Your diff now has bits of broken off metal floating around in it.
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