Japanese Carmakers Are Leaving The Country

Bertel Schmitt
by Bertel Schmitt

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.

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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  • I_godzuki I_godzuki on Jul 05, 2010

    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.

  • Bertel Schmitt Bertel Schmitt on Jul 06, 2010

    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

    • Steven02 Steven02 on Jul 06, 2010

      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.

  • Moparagain Moparagain on Jul 06, 2010

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

  • I_godzuki I_godzuki on Jul 07, 2010

    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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