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Detroit Makers Win Big as Toyota, Honda, Nissan Hit by Chinese Boycott

Japanese curb expectations for the near-term in China.

by on Nov.08, 2012

A Toyota dealership in Qingdao was burned by protestors in a dispute over an island chain claimed by both China and Japan.

What’s bad news for the Japanese is turning into a hugely positive development for Detroit and European automakers.  General Motors Co., Ford Motor Co. and Volkswagen AG all stand to benefit as Japanese automakers are forced to cut back on their sales and marketing efforts in the critical China market because of a political dispute over some nearly submerged islands in the East China Sea.

While Japan’s three largest automakers reported significant increases in earnings over the past weeks, they’ve also downgraded forecasts for the months ahead, and while a variety of headwinds face them, China is at the top of the list.

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“An ongoing fall in sales in China will directly influence our financial report for the second half” of the 2012 fiscal year which ends next March 31st, Nissan Motor Co. Chief Operating Officer Toshiyuki Shiga acknowledged this week.

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Honda to Cut Japan Exports in Half

Strong yen, potential disasters lead Japanese makers to shift more production abroad.

by on Oct.06, 2011

Honda expects to shift all but a small amount of production out of Japan over the next decade.

Honda will halve, perhaps cut by two-thirds the number of vehicles it exports out of Japan over the next decade, according to the maker’s CEO.

The move follows reports that Toyota, the industry giant, will shift production of more of its Camry models to the United States.  Other Japanese makers are reported to be considering production shifts out of their home market, as well.

Toyota Chief Executive Takanobu Ito told the Asahi newspaper that the decision was made in responsive to the fast rising yen, which recently hit a record level against the dollar.  But industry analysts say that Japanese leaders have also been exploring their production options in the wake of the devastating March earthquake and tsunami that sharply curbed automotive production for the following six months.

Like its rivals, Honda has steadily expanded its production base in North America, Europe and other parts of the world and is putting a premium on building its base now in China and other emerging markets.  Of its total global output of 3.57 million vehicles during the last fiscal year, only 910,000 – about 34% — were produced in Japan.

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But Ito said that could drop to as little as 10 to 20% in 10 years.  And even maintaining that level will require the maker to shift the production base in Japan to focus on the minicar segment – those with engines under 660 ccs.  Because of rising fuel prices and tax incentives, that market niche is one of the few bright spots in the long-stagnant Japanese automotive market.

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