By on July 5, 2010

Still convinced that the Yen is undervalued? Japanese carmakers beg to differ. They think the Japanese currency became so expensive that it gets cheaper for them to build abroad and to import to Japan. We’ve reported that Nissan is moving the production of their Micra (called March in Asia) to Thailand. When they did this, The Nikkei [sub] saw “huge implications for the future of the Japanese auto industry as a whole.” It certainly looks like Nissan’s exodus to the Land Of Smiles (and occasional riots) started a trend.

The Nikkei [sub] reports today that Mitsubishi Motors is building a new plant in Thailand. With an annual production capacity of 200,000 vehicles, it will focus on small vehicles in Thailand. The plant should start making cars by the end of 2011. Says the Nikkei: “The plant will provide small vehicles to markets including Japan.”

Mitsubishi has a long tradition making cars in and exporting cars from Thailand. The company’s first export model was the Mitsubishi Champ, which went to Canada in 1988. Since then, exports have expanded to more than 140 countries worldwide, covering Europe, Australia, Latin America, Africa, and Asia.

“Asia” can mean anything and everything. Once the cars are destined for quality-obsessed Japan, successfully making them in a low-cost country is considered as the Nobel Prize of the car business.

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8 Comments on “Japanese Carmakers Are Leaving The Country...”

  • avatar

    If you’re building a factory to supply cars to multiple markets around the world, it’s probably cheaper overall to just throw Japan onto that list and suck up any currency-exchange losses that may happen than build/re-jig a Japanese plant to build the same car just for that one small market.

  • avatar

    Land of the Rising Sun is slowly following the foot steps of Flower Flags as us folks from Middle Kingdom refer to them, all the Stars in their flag.
    Japan is copying Uncle Sam exporting jobs to countries with lower wage, is kind of a beginning of the end, a downward spiral slippery slope.
    U look at Uncle Sam now and whats the future going to be?

  • avatar

    Just because companies are importing cars to Japan doesn’t mean that the Yen is not undervalued. In fact, it has been rising and will likely continue to do so, because it is still undervalued.

    Companies would gladly build elsewhere and import if it will save them a buck. That part doesn’t have anything to do with the value of the Yen, but does have to do with cheaper labor in other countries.

  • avatar

    Hmmm, judging by how much I get for my yen lately when I buy online from outside Japan, I’d say the yen is pretty overvalued.

    While the yen has been appreciating lately, I don’t think it has anything to do with whether it is undervalued, overvalued or somewhere in betweenEvery time market types get nervy they pile into yen due to the relatively stability of Japan’s finance system (despite its 200% debt/GDP ratio) I find it baffling, but there it is.

  • avatar

    To all the fx-challenged folks out there, simple test:

    Go to Japan with dollars in your pocket. Change to yen. After two days, come back to me, but don’t hit me up for money. Be a man, hide your tears. (If you have Euros, don’t even come. Now there’s an undervalued currency.)

    Just taking the subway from one end of Tokyo to the other will set you back by $10 … or more.

    I_godzuki: + ichi

    • 0 avatar

      Doesn’t this depend on where you go in Japan? Tokyo is a very expensive city. For me, living in TX, I don’t have to fly to Tokyo for that test. I could fly to New York and see the ridiculous prices. I am sure different cities around the country have different prices.

  • avatar

    Bertel, just curious, any idea of how many lost jobs? Are the auto workers in Japan union or non-union? Not bashing just curious.

  • avatar

    there was a nikkei story a few weeks ago that talked about a million lost manufacturing jobs. Most of these would have been temp workers as companies rarely fire fulltimers

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