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Japan auto lobby wants government to counter strong yen

By SYF77 on 23 Sep 2012

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Japan's auto lobby urged their government and central bank to quickly take action to counter the strong yen after it hit a seven-month high against the dollar. The currency has strengthened to under 78 yen per dollar from more than 120 yen five years ago.

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With a strong currency, it is more costly to purchase Japanese products and squeeze the car makers profit margins. This is because earnings from overseas operation would be greatly reduced in Japanese currency.

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.

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Written by SYF77
I have been a car fanatic since 1989, when my father was changing our family car then to a Toyota Corolla 1.6 GL fitted with a Twin Cam 16 valve engine that was carburetor-fed, a big deal back in those days. The automobile technology and industry fascinates me and I hope to broadcast these interesting developments to everyone out there through this blog.

  • 1
Fastfive1 Sep 23 2012 04:16 PM
If that's the case, looks like european cars will continue to be the top sellers here.
VellfireS Sep 24 2012 12:22 AM
No matter what.. I can't afford cars now..
Creativeshoot Sep 24 2012 10:06 AM
confirmed, the situation is .... all help euro crisis lols.... biggrin.gif
Mustank Sep 24 2012 10:54 AM
if coe continues to be so high, i will change my nick to Bustank because i am taking bus sad.gif bigcry.gif bigcry.gif bigcry.gif
Heartbreakid Sep 24 2012 10:33 PM
Cost cutting, no revolution in design and engine... And coupled with price hike due to strong yen... Looks like the Japanese are going to hit a nail to their own coffin soon.
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