Yen’s rise hitting profit on small-car exports, says Toyota

Article by Christian A., on August 26, 2010

The yen's advance toward a 15-year high against the dollar has made it unprofitable to manufacture economy cars in Japan to be sold abroad. In response, Toyota Motor Corp., the largest exporter of vehicles to the US, is attempting to cut production costs for Yaris and Corolla cars.

In an interview on August 6, Atsushi Niimi, executive vice president for global manufacturing, said that with the current exchange-rate situation, it will not be feasible, in terms of a business model, for it to build Corolla or Yaris in Japan and export them. He added that the company is working very hard to lower the cost costs to keep the appeal of these cars.

Toyota and its domestic rivals have all felt the impact of the surging yen, which is up by at least 3% against each of the world's 16 major currencies in 2010.

Demand for the relative safety of the Japanese currency has increased due to speculation that Europe's sovereign debt crisis will get worse and that there will be a slowing down of the US economic recovery. Toyota fell 1.4% to close at 3,070 yen in Tokyo trading.

Masatoshi Nishimoto, a Tokyo-based analyst at consulting company IHS Automotive, said that the Japanese carmakers are considering production shifts out of Japan.

He explained that since small compact cars have lower profit margins, they are more susceptible. On Aug. 6, the yen traded at 85.02 yen against the US dollar, the strongest since November 27. This year, the currency is up more than 8% against the dollar and more than 14% against the euro.

If you liked the article, share on:

Pin It

Comments

Recommended

Has Toyota started the production of a new electric supercharger? Well, a patent that was recently published indicated that they might have. And this electric supercharger looks more durable and...
by - March 27, 2017
The Tesla Model S has finally arrived in South Korean soil and is now available for test drive. But, there’s a catch. You’ll have to wait several months if you...
by - March 27, 2017
Sorry to say this to the Sport Quattro Concept fanatics. If you guys have been hoping for the production of this iconic concept to begin, prepare for your dreams to...
by - March 27, 2017
South Korean car company SsangYong recently revealed sketches of their upcoming SUV. We’re not always impressed by Korean car designs, but this one looks quite promising. Yup, it is the...
by - March 26, 2017
Twenty-eight years after the company was first launched by Toyota, which was initially targeted to the United States market only, Lexus has already made its way to over 70 countries....
by - March 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries