The trade group also commented that automakers face costly labor regulations, high corporate taxes and an energy policy deadlock after last year's Fukushima crisis.
To reduce the impact from the rising yen, automakers are shifting production abroad. "The current foreign exchange level, which is far from the actual ability of the Japanese economy, goes much beyond the limits of what companies can do through efforts to cut costs," said Akio Toyoda, the head of Japan Automobile Manufacturers Association (JAMA).
Japan's largest car manufacturer, Toyota, is toying with the idea of increasing prices. "Facing the rise of the yen, we are considering various ways to cut costs. As a part of making the business profitable again, our options include price hikes such as for cars we export from Japan," said Joichi Tachikawa, a spokesman at Toyota.
Since the Camry and Corolla Altis models sold here are imported from Thailand, hopefully they would not be affected.