Toyota Saying Sayonara To Japanese Production?

Bertel Schmitt
by Bertel Schmitt

The ever rising yen makes Japanese manufacturers flirt with the idea of abandoning the land of the rising sun and to shift production abroad. Toyota President Akio Toyoda told Asahi Shimbun that Toyota wants to keep building cars in Japan — for domestic sales. Even that is up for discussion.

“The current situation is very tough,” Toyota President Akio Toyoda told the paper when asked how the strong yen affects Toyota’s business. “But Toyota is a global company that was born in Japan…. We would like to keep working hard in Japan.” Note: “We would like.”

Toyoda did not rule out moving its factories overseas to build models to be sold in Japan. But he added: “I have a strong feeling about manufacturing in Japan and our basic approach is to produce cars where they are sold.” Note: “Our basic approach.”

Translated from Japanese, this means. “Sorry, we are leaving.”

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  • Uncle Mellow Uncle Mellow on Sep 04, 2010

    Very hard to buy a Japanese Toyota in Europe these days - only the Land Cruisers qualify. Of course , if you like the steering wheel on the right you can buy a pre-owned Japanese market Toyota.

  • L'avventura L'avventura on Sep 04, 2010

    Toyota likes to make cars near the point of sale. Only low-volume specialty cars are still made in Japan. This is a tactic that has been slowly adopted by the larger Japanese automakers since the 90s. The strong yen is nothing new, and not unexpected. And the Japanese government has made it clear that they don't intend on weakening the yen, as shown recently by the BOJ half-assed attempt. Smaller players like Mazda (as demonstrated with the other article) have a more difficult time competing with the strong yen, but in many ways the strong yen benefits companies like Toyota in different ways. Japanese companies have been making MAJOR purchases and moves into developing countries recently ME (mergers and acquisitions) are cheaper for the Japanese while the yen is strong. For instance, Japanese automakers have been using the strong yen to fund large mining operations in South American and Canada. They are acquiring lithium ion and rare-earth magnet deposits left and right. This puts them at a strong competitive advantage over American, Chinese, and Korean competitors that have a weakened currency in the long-term if hybrids, PHEVs, BEVs, gain traction. Is is my theory that the BOJ is very cognisant that there are major advantages to a strong yen even for even an export-driven economy like Japan where classical thinking say a high-yen is bad. The Japanese have been late to enter developing markets like China, South America, and South East Asia compared to the Europeans and Americans. A strong-yen allows them to make up lost ground very quickly, very cheaply. And the expansion of Japanese companies in foreign markets has been very aggressive recently, and not just in the automotive industry. The high-yen is being used by the Japanese as a window of opportunity for overseas expansion. The yen will eventually fall when American and EU economies recover, until then they can use this opportunity in building their business in emerging economies. This is even more important being that future opportunities will be in emerging countries like China and India and less on Western markets.

  • Tricky Dicky Tricky Dicky on Sep 06, 2010

    Sorry Uncle Mellow - you are a not so accurate - Toyota Europe sell the following CBU (made in Japan models): Landcruiser RAV4 Urban Cruiser Prius Hiace HiLux iQ Whilst Toyoda may not like the current high level of the Yen, historically it does flux in a cycle which tends to be shorter than the investment timeframes for an auto plant. The only Big T vehicle I've heard they might reduce production for in the land of the Rising Sun, is transferring Prius production to Mississipi and even that is not confirmed.

  • George70steven George70steven on Nov 24, 2010

    Japanese companies have been making MAJOR purchases and moves into developing countries recently ME (mergers and acquisitions) are cheaper for the Japanese while the yen is strong. online car insurance quotes