Detroit News Declares Japanese Price War, Needs New Calculator

Bertel Schmitt
by Bertel Schmitt
detroit news declares japanese price war needs new calculator

Yesterday, the Detroit News warned of a sneak attack by the Japanese on the U.S. auto market:

“Nissan Motor Co.’s take-no-prisoners approach to gaining U.S. market share has the auto industry worried that a price war is brewing that will erode the profit progress made since the recession ravaged auto sales.”

According to the Detroit paper, Nissan’s recent price reductions are

“the first sign of a Japanese automaker taking advantage of the weakening yen that Prime Minister Shinzo Abe has pushed down to improve Japan’s economy. That currency’s 15 percent swoon versus the dollar since Oct. 31 gives Japanese automakers an extra $1,500 per car they can use to cut prices or offer additional features while keeping prices even.”

It’s only a sign if you are both blind and fact-resistant.

Nissan lowered the price of its Altima by $580, and its sales “jumped 41 percent, surpassing Ford Motor Co.’s Fusion and closing in on Honda Motor Co.’s Accord,” reports the DetN from the price war front.

Joining the militaristic metaphors is Michelle Krebs of Edmunds. Nissan’s price reductions “strike me as a scorched earth policy of going for market share and sales volume at seemingly all costs,” Krebs said.

What they all forget or simply don’t mention is the fact that the Altima, along with more than 70 percent of the cars sold by Nissan in the U.S., does not come from Japan. The cars are made in North America. The cars are completely decoupled from the yen. “By 2015, Nissan aims for 85 percent North American production,” says Nissan’s Yokohama spokesman Chris Keeffe. “We build where we sell.”

Last week in Nagoya, Toyota’s America-Chief Jim Lentz said the same, and he flatly denied that the cheaper yen has any influence “either on price or on the equipment level – we price to market, not to a currency rate.”

The fact that a car made in North America can’t get cheaper just because the dollar buys more yen in Tokyo seems to be too complicated for the Detroit paper and its Detroit sources.

Or possibly, both simply trust that they can play the American public for a big fool.

The DetN missed a scoop: The yen actually is nearly 20 percent cheaper than on Oct. 31, not 15 percent, but numbers are not the DetN’s strong suit:

When Nissan shaves $580 off an Altima to get its formerly lackluster U.S. sales going, then that’s a “price war” invl the DetN’s book. When GM takes $5,000 off the price of a Volt, then “Detroit has implemented discounts on some models, such as the Chevrolet Volt plug-in hybrid, and offered promotions such as free oil changes,” writes the Detroit News, reporting live from the alternate reality .

And this is Mulally on drugs: Allegedly manipulated “cheap” yen should be a lot cheaper to trade at “normal” levels

Ford especially has been pushing the tale of “the Japanese manipulate the yen” for years, even when the yen was obscenely high. It always found journalists to go for the story. Just hours ago, Alan Mulally told Bloomberg that “Japan is “absolutely” manipulating its currency,” and while he was at it, “that Japan is a closed market for U.S. automakers.”

While this inanity may play well in Idaho, neither the Detroit carmakers nor the Detroit News scribes are that stupid. Most likely, they set the scene for bigger discounts and smaller profits, while blaming it on the people they usually blame, the Japanese.

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  • Big Al from Oz Big Al from Oz on Jun 20, 2013

    The US is under attack again? It seems to be the mantra for its existence. What about the US with its recent policies managing its ecconomy. Is that currency manipulation? Look at what it has done to our manufacturing sector in Australia. Hey, but when you guys act in a similar it is for the good of the world. Not mentioned the 30% of Japanese vehicles moved across the Pacific, the cost or transportation, which runs into several thousands of dollars. If the Big 3 can't compete then maybe they should sit down with the UAW, management and government to find ways to increase their competitive edge. Maybe a chicken tax on car imports? I do think the US relies on scare tactics to mobilise and modify paradigms. The continual perception that US is under threat so much by foreign companies/countries is wearing thin. There are real threats and not so real threats, this isn't a threat, just a wake up call. Maybe Detroit should just make the hard decisions with the government and UAW. Get on with it and stop whining, have a look at restrictive UAW workplace practices and become competitive. The foreign manufacturers in NAFTA don't seem to have this problem or did they require bailouts during the GFC. And try and call me anti American again, I'm not I'm just a realist.

  • Ccode81 Ccode81 on Jun 20, 2013

    Then why did they sold stakes in Mazda, if Japan is such a nice base camp to attack other markets. At least, they sold it at the timing of very favorable currency rate in 2010...

  • Legacygt Great review. I've only driven one Wilderness model (an Outback provided as a dealer loaner) and I found the handling a little sloppy on-pavement. It's good to hear they managed to give the Crosstrek the Wilderness treatment without hurting the on-pavement experience.And this is the first time I've read a review that dared to criticize Star Tex seats. I find the material interesting and low maintenance and fairly comfortable but I totally agree that it rates very poorly for breathability. It's so bad that I think Subaru should offer it with some sort of ventilated option. 5 minutes on a hot day and you're sitting in a pool of sweat.
  • Analoggrotto Too bad they don't sell Kia Telluride, the greatest selling vehicle in it's class over the pond in the UK who burned Washington DC down but that's ok.
  • Analoggrotto Kia Telluride never faced such problems and now offers a superior offroad trim for those times where soccerdad needs to go get the white claws from costco.
  • Zerofoo There's a joke here somewhere about Tim's used car recommendations, Tassos, and death traps.
  • Tassos Subaru really knows how to take fugly to ever higher levels, and sell every one of the (of course very few) it makes. As if the number of sales negates the fugliness.Don't hold your breath. I bet this will NOT be the vehicle James Bond arrives at the Casino in Monte Carlo with in his next flick. (if any)