Honda is considering importing cars into South Korea from the United States instead of neighbouring Japan as it is cheaper to do so. The reason for this is that the Japanese yen is very strong, making exports from Japan expensive. The announcement comes after another Japanese carmaker, Toyota, said last week it would sell U.S.-made Sienna minivans in South Korea.
Currently, the only U.S.-built model sold by Honda in South Korea is the Accord, with four other models sold locally being imported from Japan (the CR-V, CR-Z, Insight and Civic). Honda’s CEO Takanobu Ito stressed that the strong yen is making exports from Japan less profitable for the company and less competitive. He also said that a planned free trade agreement between South Korea and the United States is another cause for which Honda might reduce shipments from Japan and turn to the U.S. instead.
Japanese car companies have criticised the government for not controlling the yen’s rise and for not signing free trade agreements. They also complain that it is difficult to compete against companies like Hyundai or their European counterparts under these circumstances. Sales of Japanese cars in Korea fell 21 percent in the first ten months of this year, while sales of German cars rose by 34 percent. Last year Honda sold 5,600 cars in South Korea, while Toyota sold 10,000.