Japanese Car Exports Unimpressed By Rising Yen
Japanese automakers keep saying the ever appreciating yen will be their undoing. So their government intervened, sending the yen back to 85 to the dollar. Once the intervention stopped, the yen continued its march upwards. Today, the Japanese currency stood at 83.31 to the dollar. Which is losing strength across the world. The Europeans received $1.36 for their Euro today. A higher yen making Japanese cars more expensive should hurt Japanese car exports, don’t you think? Let’s see.
Japan’s exports of cars, trucks and buses increased 22.5 percent in August, reports The Nikkei [sub]. Exports have been rising for eighth straight months now. Exports to North America are declining, Europe, Asia, the Middle East and Latin America are buying Japanese cars with a vengeance, the Japan Automobile Manufacturers Association said today. Japan exported 337,163 vehicles in August, up from 275,186 vehicles in the same month a year earlier.
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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Toyota's top sellers in the USA and Canada are all made over here with mostly domestically sourced parts. So they are not really imports. Lexus buyers won't be as price sensitive (RX is also made here). Same answer for many of the other Asian cars. Even if some parts are imported, the big labor cost is dollar denominated.
That's weird Bertel. According to ACEA's latest sales figures for Europe, YTD vs. LY: Toyota Group - 15.8% Nissan + 19.6% Suzuki - 26.1% Mazda - 9.2% Honda - 25.0% Mitsubishi - 11.9% I'd conclude from that info, that Japanese auto firms are taking a hammering. In the last year, the Euro-Yen FX rate has gone from a high of 138 to a low of 106 (this month, today having been pushed up to 114 by BOJ intervention). On the ground, many Japanese imported cars are priced so high as they can't compete. Japanese cars rarely have a style/ acceptance advantage over their European rivals, so they usually have to be price competitive to shift. So I don't think your story really adds up in this region, but maybe elsewhere?
The Japanese makers did a great job of establishing assembly in the US and China so the Yen-Dollar doesn't affect sales there. Now the appreciating Yen makes investing in expansion cheaper there too. The rest of the world's currencies aren't changed much against the Yen, so the world markets for small Japanese cars keeps the home factories humming. If only the American carmakers could have planned ahead that well.
US automakers planned perfectly for this recession. It took them 30 plus years of planning and pissing on their customers to bring the US auto industry (or at least Detroit and Auburn Hills) to the brink of Armegeddon. They extracted $50 Billion plus in taxpayer bailout monies, not counting all the loans, cheap credit, and soon to be taxpayer funded Superfund sites they left behind. STILL bitter about my new POS '03 Bonneville. STILL want to see GM die.