As the yen weakened against the dollar for a second consecutive year, Honda, Nissan and Toyota all set production records in their North American plants in 2013, according to Automotive News.
Ford has long been at the forefront of the currency debate, claiming currency manipulation when the yen went to levels that nearly killed the Japanese auto industry, and shouting “currency manipulation” now that the yen is back to normal levels. Now, Ford itself experiences the devastating effects of changing exchange rates: Ford is shutting down all its manufacturing operations in Australia. The reason: A strong Australian dollar. Says Reuters:
Of course, Carlos Ghosn did not miss this opportunity to talk about his most favorite topic: The value of the yen. As last Friday, the CEO of Renault and Nissan still does not want to hear talk of a low yen. Ghosn says the Japanese currency “is coming back to normal levels,” and as far as Ghosn is concerned, the yen still has some ways to go. Even if this freaks-out the CEO of Ford.
The retreating yen allowed Honda and Mazda to report bigger profits for the last quarter of their April to March fiscal year. Now the two are faced with a new problem, one that will also be shared by its Japanese peers: Higher costs of badly needed foreign investments.
A weak yen and a slew of new models has Mazda within sight of profitability. With Mazda heavily dependent on exports, the yen’s 16 percent decrease in value relative to the U.S. dollar could not have come at a better time for Mazda, as it readies a whole slate of new products for sale.
With the closure of Japan’s last operating nuclear power plant hitting the news over the weekend, people asked me what that means for Japan’s auto industry. My answer: Nothing. The shutdown of the first nukes on March 11 a year ago was much more dangerous than the long scheduled downing of the last. Nissan’s Carlos Ghosn sees a much bigger danger: the power of the yen. The high yen at the currency exchange. And higher yen numbers on the electricity bill.
Today, Nissan had invited distinguished guests, from the Governor of Kanagawa province all the way to the chief of the local fire department, to commemorate the 30th anniversary of the Nissan Technical Center. Nissan’s main R&D hub is a city of 9,500, nestled into the foothills of Mount Fuji and surrounded by hills that keep it away from prying eyes. To get there, you must drive through a tunnel. Let’s see what we find here …