To offset the stronger yen, Toyota Motor Corp. may "deepen alliances" with its dealers and suppliers, the company's president, Akio Toyoda, disclosed on Thursday. He further stated that the company is unlikely to purchase companies outright, adding that they "are not good at acquiring companies." In late October, the increase in the yen hit a record high against the U.S. dollar.
This increase has reduced the profits of companies like Toyota that export Japan-made products. However, the surge of the yen has also provided opportunities for Japanese companies to seek growth and expand by purchasing offshore assets at a lower cost.
However, Toyota Motor Sales President Jim Lentz commented that Toyota is unlikely to take this route. He added that Toyota will instead be more likely to enter partnerships, such as the one it inked earlier with Ford Motor Co. to develop phone, navigation and entertainment systems and to manufacture hybrid SUVs and trucks. This deal will enable Toyota to deal with an area of vehicle technology where it has lagged.
According to Nissan Motor Co Ltd. Chief Executive Carlos Ghosn in an interview with Japan Society in New York, the strong yen may force some companies to transfer production outside of Japan. He added that just one thing has to be fixed – the exchange rate.
On another note, Toyota celebrates the opening of its fourth assembly plant in the United States, which was expected to open in 2010 but was delayed. The plant, located in Mississippi, produces around 40 vehicles a day. The capacity will later on be increased to around 150,000 vehicles annually, Toyota officials revealed. The Corolla is the company's second bestseller after the Camry sedan. [source: Autonews]