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70% of Japanese Cars Sold in U.S. Now Built in North American Plants

Japanese have created 407,000 U.S. jobs, says new survey.

by on Jan.02, 2012

Honda launched production of the latest Odyssey minivan at a plant in Alabama last year.

Nearly seven in 10 of the Japanese-badged cars, trucks and crossovers sold in the U.S. last year were produced on a North American assembly line, according to a new report.

More than a quarter century after the first Japanese transplant – a Honda factory in Marysville, Ohio – went into operation more than 400,000 jobs in the U.S. have been created by the Japanese, according to a new report by the Japanese Automobile Manufacturers Association, or JAMA.

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And that trend could continue.  With the yen stronger than ever, manufacturers like Toyota, Nissan and Honda are steadily shifting production away from the home islands.  Within the last several months Toyota has announced plans to begin producing several product lines, including the Sienna minivan, in the U.S. for export to Korea.  They had previously been produced in Japan.


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.


Toyota May Shift More Camry Production from Japan to U.S.

American plant would serve as export base to Korea.

by on Oct.05, 2011

Toyota is likely to shift more Camry production out of Japan to the U.S.

Plagued by a strong yen that is making it increasingly difficult to produce cars in the home market, Japanese giant Toyota Motor Co. may shift production of more of its popular Camry sedans to the U.S.

Toyota plants in North America already provide the majority of the vehicles the maker sells in the U.S. and Canada, notably including the 25-year-old Camry factory in Georgetown, Kentucky.  But, according to the Nikkei business daily, such a move – not yet confirmed by Toyota – would be used to supply the Camry to South Korean Toyota dealers.

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Japanese makers, in general, have been struggling to deal with production at home with exchange rates slashing their profitability.  Makers like Toyota had, until recently, been hoping the yen would stabilize at or just above 80 to the dollar, but in recent weeks it has soared to a record high of 75.94.

That is making it increasingly unprofitable to ship vehicles not only to the States but to other countries that tend to peg their own currencies to the American dollar.


Toyota Won’t Abandon Japan

CEO Toyoda will maintain “illogical” Japanese production base.

by on Jul.15, 2011

It may be "illogical," but Toyota CEO Akio Toyoda won't give up on building cars like Prius in Japan.

As his nation struggles to rebuild after the devastating earthquake and tsunami of March 11, Toyota Motor Co. CEO Akio Toyoda says he won’t contribute to Japan‘s problems by shifting more automotive production offshore – even as it contributes billions of yen in losses to the world’s largest automaker.

There had been mounting fears in the troubled Asian nation – but hope among many investors – that the Toyota family heir would use the crisis to justify a shift away from the home market reliance that has made it difficult to resume production after the disaster.  Japan’s largest automaker, Toyota has traditionally positioned its hefty Japanese production base as a matter of civic responsibility, though in the weeks after March 11, Toyoda admitted it was becoming increasingly “illogical.”

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Toyota controls roughly half of the home market, but its production base there is far more than what’s needed simply to supply Japanese vehicle needs.  Competitors like Nissan have steadily fled offshore – Nissan CEO Carlos Ghosn closing four Japanese plants since taking over that company’s reins in 1999.  But while most of Toyota’s growth has been fueled by new plants in places like North America, Europe and China, the maker has been reluctant to walk away from its original production base.

“Toyota is a company that was born and raised in Japan and we can’t just abandon it because the environment is difficult,” said the grandson of the company founder, insisting the automaker would “grit our teeth and protect Japanese manufacturing.”


Toyota U.S. Plants Due Back to Normal By September

Factories rebound ahead of expectations.

by on Jun.16, 2011

Toyota now expects to have production of all 12 models built in North America back up to normal by September.

Working with suppliers – and finding alternative sources, where necessary – Toyota today said it expects to have its North American vehicle production back to normal by September, notably earlier than it originally feared following the disastrous Japanese earthquake and tsunami of March 11.

The entire Japanese auto industry has been feeling the pinch of parts shortages resulting from the March disaster, which struck Japan’s northeast coast, killing tens of thousands and damaging or destroying 100s of automotive parts facilities.

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Like most of the Japanese competitors, Toyota’s home market plants were shuttered for the better part of a month and its entire global factory network has been operating well below capacity since then.  Toyota was particularly vulnerable, however, because it produces significantly more vehicles in Japan than key rivals Nissan and Honda.


Japanese Production Bouncing Back – But Automakers, Suppliers Ready to Abandon Quake-Prone Nation

“Frantic” efforts and “war rooms” helping suppliers get back to business.

by on May.12, 2011

The March 11 quake -- and the strong yen -- could lead Toyota and others to increasingly shift more of their production out of Japan.

It won’t be a good year for Japanese automakers large or small.  The disaster that shook the island nation two months ago all but shut the industry down for a month and makers will be operating at a fraction of normal levels for some time due to shortages of parts ranging from plastic panels to microchips.

But a massive, behind-the-scenes effort could end the crisis a bit sooner than expected – though it leaves many observers wondering just how much Japan’s home auto industry will be hollowed out in the process.

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Even as manufacturing slowly creeps back to normal, industry officials are warning that they may shift more of their operations – both automotive assembly and parts production – out of quake-prone Japan.

“How much longer should we insist on producing in Japan?” asked Chief Financial Officer Satoshi Ozawa, as the maker announced a 77% plunge in its profits on Wednesday.


Toyota Output Down 542 Thousand in March

Japanese makers reporting huge production losses after March 11 disaster.

by on Apr.25, 2011

Toyota is building Prius again - but at a reduced rate.

The devastating disaster that struck Japan last month has a calamitous impact on the world’s largest automaker, Toyota Motor Co. today reporting its global output fell by nearly a third in March — and with the company unlikely to resume normal production levels until the very end of 2011, Toyota seems all but certain to lose its position as industry sales leader.

But Toyota is by no means unique among Japanese makers.  The Asian nation’s powerful auto industry has been humbled by the combination of a 9.0-magnitude earthquake, tsunami and nuclear power crisis that continues to wreak havoc on Japan’s manufacturing capabilities.

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Toyota has been especially hard hit because it depends more on Japanese assembly lines than other major Japanese makers, like Nissan and Honda, who have steadily shifted more and more of their production abroad.  But even those makers are struggling because of their continuing dependence on Japanese-made parts shipped to so-called “transplant” assembly lines in North America, Europe and other parts of the world.

Toyota’s Japanese-based plants were all but shut down in the wake of the March 11 disaster, vehicle output for the month plunging to just 129,491, a 63% decline.  Of that number, 107,751 were exported, a 33% drop from year-earlier levels.


Toyota Faces Ratings Downgrade

Moody’s eyes impact of March 11 disaster.

by on Apr.06, 2011

Work at Toyota plants worldwide has been impacted by the March 11 disaster in Japan.

Already slammed by the March 11th natural disaster that has left it struggling to resume normal production, Toyota may soon be hit with a ratings downgrade by Moody’s Investors Service.

Such a move could add to the maker’s costs at a time when it is struggling under the loss of hundreds of thousands of units of production.  Even before last month’s earthquake and tsunami – and the subsequent Japanese nuclear crisis – senior Toyota officials were warning that they’d need to take aggressive steps to cut costs and boost profits.

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Saying it will take “many months” to get the company’s operations back to normal, Moody’s issued a warning that it is giving serious consideration to a downgrade of the maker’s debt, which currently stands at Aa2, an investment grade that Detroit’s makers can only dream of achieving.

The ratings firm did note that it, “will also consider how quickly the company can improve its profitability despite the negative impact of the disasters.”


Some Japanese Car Plants Ready to Reopen

But problems persist and could threaten GM.

by on Mar.16, 2011

Toyota pares back production of models like Camry at North American plants but resumes some Japanese operations tomorrow.

With the lights on the landmark Tokyo Tower darkened due to power shortages across the country, things are anything but back to normal in Japan, but one sign of progress comes from Toyota, which says it will reopen some of its parts plants on Thursday, though the maker will keep assembly lines shuttered until at least the 22nd.

The plants resuming operation tomorrow will supply much-needed parts to vehicles in use in Japan.  Meanwhile, Toyota said, it will resume production, next Monday, of parts needed by its overseas plants.

That’s good news for managers of assembly operations in North America, where the maker late yesterday announced it would trim overtime and Saturday hours because of the threat of possible parts shortages.  Like many so-called “transplants,” Toyota’s U.S. and Canadian assembly lines remain dependent upon many parts and components shipped in from Japan.

“It didn’t make any sense to build vehicles on overtime if we were not sure we would have enough parts,” explained spokesman Javier Moreno.  How long the slowdown will continue remains uncertain.  “We’re not sure how many parts they can send us,” said Moreno.

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Toyota isn’t the only maker worried about the impact on foreign operations.  Subaru has halted production at its Indiana plant.  And even Detroit makers are worried about parts shortages triggered by problems with Japanese suppliers.

Chris Perry, General Motors vice president of marketing, told reporters in Detroit it is possible GM’s production in the U.S. could be hurt. “It’s going to have an effect on all manufacturers,” said Perry adding the impact could extend to GM’s operations in China.


Domestic Makers Wary of Disruptions from Japanese Disaster

Problems with Japanese suppliers threaten Detroit’s Big Three.

by on Mar.15, 2011

Shortages of Japanese-made components, such as semiconductors and batteries, could bring trouble for U.S. makers, including Ford, which uses Japanese batteries in its Fusion Hybrid.

While the Japanese auto industry reels from the devastating one-two-three punch of earthquake, tsunami and multiple nuclear accidents, domestic carmakers are also growing increasingly anxious about the global reach of the catastrophe.

Officials from General Motors, Ford Motor Co. and Chrysler Group report they are monitoring the situation carefully – while also exploring the potential for alternate sourcing of components currently purchased from Japan.

The lack of a single key component could bring an assembly plant to a sudden halt, industry insiders fear.

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“One area of growing concern is the supply of automotive semiconductors,” noted analyst Rod Lache, of Deutsche Bank.  “Auto Industry purchasing execs had already expressed concern about tight supply of Auto Semis even prior to the disaster.”

These are the central components of today’s digital automotive componentry, whether used in engine management systems, airbag controllers or an infotainment like Ford’s Sync.  Japan, said Lache, produces about 22% of global auto semiconductors.  But the production process is particularly sensitive, and “even millisecond (electric) outages or small tremblers can result in the scrapping of weeks of in-process production.”