High yen prompts Nissan to shift Infiniti vehicle production outside Japan

Article by Christian Andrei, on April 6, 2012

Nissan Motor Co. will have to transfer production of Infiniti automobiles to other locations outside Japan due to the high Japanese yen, CEO Carlos Ghosn disclosed. He emphasized that they should manufacture the vehicles where they sell them. Presently, Infiniti imports each of its models except for one from Japan. In March, the luxury brand commenced the manufacturing of the latest JX35 crossover at the Tennessee assembly plant of Nissan.

Ghosn revealed that China and North America are being considered for the additional sites for Infiniti production. Earlier this year, Nissan announced that it would construct a new $2 billion assembly plant in Aguascalientes, Mexico. It has not disclosed what this site would be producing. 

In Wednesday trading, one dollar bought 82.36 yen. However, the Japanese currency has bounced off its latest highs. In a major way, the strength of the yen has adversely affected the earnings on exports of the Japanese vehicle manufacturers, prompting them to shift more output offshore.Ghosn asserted that the yen's high value was responsible for hampering Infiniti from achieving his goal of achieving 10% of worldwide luxury sales.

He acknowledged that Infiniti still has a long way to reach that goal. He noted that the luxury brand is not marketed in Japan. He further stated that with the high yen, sourcing in Japan is "obviously not the right system." In 2011, sales of Infiniti in China increased by 61%, the company disclosed. Recently, the carmaker announced that it will transfer the global operating headquarters of Infiniti out of Japan to Hong Kong. [source: Autonews]

Topics: nissan, japan

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