Toyota Mulling The End Of The Japanese Corolla

Edward Niedermeyer
by Edward Niedermeyer
toyota mulling the end of the japanese corolla

A report in Japan’s Kyodo news agency [via Reuters/ Automotive News [sub]] must have raised a few eyebrows in Japan: thanks to a rising Yen, Toyota is reportedly eying an end to Corolla exports from Japan by 2013. Toyota has since emphasized that

it has made no decision to halt production in Japan of its Corolla automobiles for overseas sales but said it was always considering an optimum global production structure.

The yen hit 81 to the dollar today, both on Yen strength and dollar weakness. ( A Euro buys 1.41 dollars again – get ready for Eurotrash invading Manhattan.)

Toyota has already shifted the bulk of its Corolla production overseas: last year it built 815k Corollas outside of Japan, and only 235k in its home country (60 percent of which were exported). Still, Toyota has long considered stability in its Japanese workforce as core institutional value, and previous currency rises led to changes in design and quality philosophy rather than reductions in Japanese production levels. But then Toyota is no longer in a position to release currency pressure by targeting “fat” or “overquality” product the way it could in the early 90s. The “overquality” simply isn’t there anymore. Like everyone else, Toyota’s major competitive option is to move production closer to cheap labor and large markets.

Comments
Join the conversation
12 of 23 comments
  • Obbop Obbop on Oct 14, 2010

    I demand a recount.

  • Ash78 Ash78 on Oct 14, 2010

    The problem with Toyota is just like the problem with VW, from other ends of the spectrum One company sells cars that were traditionally cheap, very boring, but extremely reliable. The other sold cars that were a little more expensive, with great initial quality, but poor long-term reliability. These days, competition has closed the gap like a vise from BOTH sides, marginalizing those two companies into a sea of undefined blandness

  • L'avventura L'avventura on Oct 14, 2010

    The world is currently in a race of Competitive Devaluation of currency. China is head-strong about devaluing its Yuan, America is going through yet another round of QE 'printing money', South Korea continues to engage in comparative devaluation policies, and even Brazil is moving to weaken its currency. America contends that the artificially devalued Yuan is forcing everyone's hand on this. Economics Nobel-prize winner, Paul Krugman lately wrote in the NY Times that Competitive Devaluation is an inherently unstable game for all participating parties. Oddly, its a game that the Japanese have pulled away from. While both the BoJ, as well as the EU, have engaged to reduced their currency somewhat. Its been reactive, and largely to appease political critics. The consequence is that Japanese companies like Toyota moves their production overseas. Those same companies benefit from incredible strong yen, costing those companies less to build foreign factories. Ben Bernake said that deflation is the easiest thing to fight (just print more money), and he is proving himself right. Inflation is hard to fight, and Competitive Devaluation is massive inflationary vehicle, and the benefits aren't present if all parties engage to devalue their currency. Japan may risk losing more manufacturing jobs, but Japan, and the EU, may ultimately be wiser by pulling themselves out of this fight.

  • Windswords Windswords on Oct 14, 2010

    "What is more American, a Ford Fusion built in Mexico or a Toyota Camry built in Kentucky"? . Well maybe you should take a closer look at that Camry bud, 'cause it could very well have been built in Japan, as a lot of them still are. Same for Honda and Nissan I think. At least the Ford has a lot of US/Canadian parts. I doubt Toyota is importing any significant NA parts for Japan built Corollas and Camrys.

    • See 7 previous
    • Windswords Windswords on Oct 14, 2010

      "and only 235k in its home country (60 percent of which were exported)." . Remember that this number is down due to the economy. Before carmeddon, there were significant numbers of Accords, Civics, Camrys, and Corollas imported here from Japan. Anyone can look the numbers up and it was more than just few thousand. Of course other brands (Lexus, Accura, Scion) were built almost exclusively in Japan. The trend is now firmly headed towards local production but it's still no guarantee your car was built by southern good ol' boys.

Next