Japanese travel posterWhat’s built in Japan, stays in Japan? Japan has long been one of the world’s largest exporters of automobiles. But as the value of the yen creeps even higher versus the dollar—a trend that’s been even more rapid the past several years—concerns are that even the domestic industry might need to move most of its manufacturing (for vehicles not destined for Japan) elsewhere. Especially for American car buyers, the chances that a Japanese-brand model you see on the lot was actually made in Japan will become slimmer than ever.
Japanese travel poster
In a Q&A session with reporters, Nissan CEO Carlos Ghosn was especially vocal about the matter. “I would say the major problem we are facing today is the uncompetitive level of the yen,” said Ghosn, calling the yen a “unique handicap” for exporters from Japan. In keeping the value bolstered at this level, Japan is giving an incentive for companies to move their manufacturing facilities out, added Ghosn, who declared that there’s simply no profitability from cars built in Japan for export, so manufacturing is going to continue to shift to Thailand, China, Mexico, and other countries unless Japan changes the environment.
A lot is at stake for Japan, as more than 50 percent of Nissan’s current global production is in its home country. If manufacturing is moved elsewhere, there’s (valid) concern that research and development dollars eventually will move elsewhere, too.
Mitsubishi MirageEnlarge Photo
Will Japan fix its trade woes, and can the Japanese industry gain its momentum back? We have a feeling that we’ll have an answer to that by the time the next Tokyo show rolls around in 2013.