Nissan And Toyota: Sayonara Japan, We're Going To America

Bertel Schmitt
by Bertel Schmitt

Both Akio Toyoda and Carlos Ghosn are in the U.S. and what are they doing here? They complain loudly about the high yen. Akio Toyoda uses an interesting reasoning. It may make Americans wish for an even higher yen. Toyota may shift a “significant” amount of production to the U.S., if the yen stays high, and if demand in Japan will fail to consume Toyota’s vast capacity there. If the majority of Toyota’s output is shipped overseas, then factories will follow.

“If demand in Japan recovers, we will continue and work to maintain production of 3 million units” in Japan, Akio Toyoda said to Bloomberg. “If most of it becomes exports, shifting a significant amount of production to the U.S. may be considered.”

“If the yen continues to stay strong, Toyota will collapse,” Toyoda said at an opening event for a factory in Blue Springs, Mississippi. He reiterated comments he had made recently at a JAMA press conference in Tokyo, where Toyoda said that Japan’s automobile industry may no just hollow out, but “collapse” unless the yen goes back to more palatable levels. Toyoda usually is not prone to grandiose rhetoric, and when he says „collapse“, then he means it.

At the same time, Nissan & Renault co-CEO Carlos Ghosn said yesterday at the sidelines of an event of the Japan Society in New York City: “What’s taking place now is many projects are now basing their manufacturing outside of Japan because they just cannot survive with this 77 yen to the dollar.” Says The Nikkei [sub]:

“Ghosn called the rate of 77 yen per dollar “unbearable” and said many Japanese companies are shifting their operations overseas because they do not see any clear prospects for an end to their predicament. Ghosn criticized the government for lacking effective measures to fight the yen’s record appreciation at “the worst time for the Japanese economy,” citing the March 11 earthquake and severe floods in Thailand.”

Since 2007, the dollar has fallen more than 35 percent against the yen, a currency which some dimwits who had not updated their dog-eared talking points, steadfastly call overpriced and manipulated by the Japanese government.

Listening to Ghosn’s comments, people may remember that he had mentioned building a new entry-premium Infiniti using a Mercedes platform – somewhere. It could be Europe, China, the U.S. or elsewhere ( maybe Mexico), but definitely not Japan. Additionally, Financial Times Germany floated rumors of a joint Daimler/Nissan engine plant in the U.S. Infiniti will buy two diesel and one V6-gasoline engine from Daimler, beginning in 2013, but Daimler’s European capacities are tapped out.

Bottom line: The high yen will most likely not help the Detroit 3 as much as it will create jobs on U.S. soil. And that’s where a high yen comes in handy: A yen that buys 35 percent more in dollars makes such an investment 35 percent cheaper.

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=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Pch101 Pch101 on Nov 18, 2011

    It would be nice if some of those of you who comment here would figure out that a company's contribution to the American economy is not tied strictly to the ZIP code of its headquarters. It would be really convenient if life was that simple, I know. But it isn't.

  • Xpistns Xpistns on Nov 19, 2011

    Go easy there, Vanilla. I once had a conversation with some "patriotic" co-workers complaining about profits going back to Japan even though my Accord was built by my fellow Americans and her Chevy Aveo was built in Korea. Given this, it's difficult to choose where to put your money--but we should NOT buy anything simply because it's American. That's like a mother giving her drug-addict son more money while begging him to stop. Doing so would only prevent us from becoming better at building better, competitive products. Isn't that how a "free" economy works? My mom raised us by herself working two jobs and only buys American cars but it was so painful to see her get gouged by the Plymouth dealer to replace the Mitsubishi engine twice in her first gen Voyager. I know it hurts, but the domestics will need to continue to care more about me and my family to get my hard earned dollars.

  • Redapple2 HK: The Redapple is the TTAC resident HK hater. I have listed the reasons before. But, I am smart enough to keep my eyes open. I will say this. Overall, they have the best styling/design in autodum. I may not like certain models, but overall, they try. They try something new, different, fresh. Some models are great. Some so-so. But they are TRYING- All the time. Year after year. Other brands are locked into a firm theme - across multiple models and brands. Some lasting decades EX. Evil gm vampire Cadillac Arts and Science has been around for 22 years. Flawed fugly from the start. Never got better.
  • SCE to AUX This is the right direction for EVs, but I can't warm up to Kia's latest styling.This is bad news for Rivian, whose similarly-specced R3 isn't due until 2027 or something.Perhaps a low-spec version will start at $30k (maybe), but the 300-mile version with trimmings will certainly run closer to $50k. Then everyone will say Kia lied.
  • Buickman foolishness has no bounds, or borders.
  • JMII Wonder what the Hyundai version will look like because I am NOT a fan of this styling.Also someone needs to explain to H/K/G that you want the dark colored interior parts were you touch/sit and the lighter color parts elsewhere. For example the door panels here are dark with light armrests - this is backwards. Genesis made the same mistake in the GV60's white/ash (grey) interior. While I greatly appreciate something other then the dreaded black cave interior did they not consider how impossible this will be to keep clean in the real world?
  • JMII I see lots of ads for their CUVs but given the competition in this segment why would I buy an Outlander over a similar product from Toyota, Honda or Hyundai? Mitsubishi needs to offer something compelling, some hook or defining difference. I don't think I've encountered a single person who says "wow have you seen the new [blank] from Mitsubishi? I need to get me one of those".I owned a Mitsubishi Eclipse GS-T back in '96 and it was fun car. Mitsubishi once made interesting choices with a rally heritage - those cars were fast and pretty high tech at the time. Like Nissan they kind of fell into the we will finance anyone pool so other then an Evo as a track toy anyone I knew steered clear of them.