Strong Yen Makes Toyota Rethink Production in Japan

In a press conference by Toyota Motor Corp.’s president Akio Toyoda today, Toyoda announced that the strength of the Japanese yen may cause Toyota to shift production of compact cars to other countries. Toyota is not the first Japanese car company to come out against the yen. Nissan has also pleaded to the government to weaken the yen, or they would pull out of domestic production as well.

The yen has been incredibly strong against the U.S. dollar as of late, causing profit margins to erode for many of the domestic Japanese automotive manufacturers. Coupled with lagging demand in the U.S., and supply chain disruptions due to the earthquake, Japanese brands have had a difficult set of circumstances as they struggle for sales in a tough year.

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Toyota production will be back up sooner than originally planned!

From the Detroit Free Press:

Toyota will begin cranking up its North American factories faster than expected, returning to 70% of normal production in June as it rebounds from parts shortages caused by the earthquake in Japan.

The company cut production to about 30% of normal in May by idling factories for several days or reducing their hours. It warned dealers to expect shortages of some models well into the summer.

But Toyota said Wednesday that the parts situation is improving as supply companies take measures to counter the effects of the quake.

A March 11 earthquake and tsunami damaged auto parts plants in northeastern Japan, causing shortages that have affected nearly all automakers but have hit Toyota and Honda especially hard.

Toyota said in a statement that it would evaluate production for each model every month, and it may not return to fully normal production until late this year.

Next month, though, Toyota will move to 100% production of eight models in North America. They include the Avalon large car, Camry midsize car, Corolla compact, Highlander SUV, Matrix small car, Sequoia large SUV, Sienna minivan and Venza crossover vehicle, Toyota said in a statement.

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