DAVOS, Switzerland — Carlos Ghosn, chief executive of Nissan Motor on Wednesdays said the automaker needs to curb exports from Japan to scale back exposure to the yen.
“Today we are too much dependent on the yen. In the future we need as a company to reduce our dependence on the yen. So it’s not the question that the yen is strong today and will be weaker tomorrow,” Ghosn said.
“We will still be exporting from Japan, but we want the level of exports from Japan to be smaller.”
When asked about the desired yen level, the executive said “the neutral level of the yen would be somewhere between 90 and 100 (per dollar).”
His comments come a day after Nissan announced plans to spend up to $2 billion to build a third plant in Mexico to supply markets in Latin America and the U.S. and three months after it disclosed it would build a new plant in Brazil.
Nissan said the plant will open in late 2013 and be able to produce 175,000 cars per year. Construction will begin this summer. The plant will create 3,000 jobs, bringing the company’s total workforce in Mexico near 13,500.
The Yokohama, Japan-based automaker already has two plants in Mexico – one in Cuernavaca in Morelos state near the capital, and a second in Aguascalientes – and holds a quarter of the market as the nation’s best-selling auto brand.
Last year, buffeted by three historic calamities–the March 11 earthquake/tsunami/nuclear accident disaster, the floods in Thailand, and the super-strong yen–Japanese makers’ global sales continued a three year slide to below 30 percent.
Japan’s exports declined in 2011 due to decreased production of cars and other products in the wake of the March 11 Great East Japan Earthquake, and the historic appreciation of the yen.
A yen near postwar highs against the dollar is cutting into profits of exporters from Nippon Steel Corp. to Toyota Corp. by making Japanese products more expensive abroad, hampering the nation’s rebound from March’s temblor.
The $32bn deficit for 2011 reflected a 2.7 per cent decline in the value of Japan’s exports, which fell to $843bn, according to the Ministry of Finance figures released on Wednesday.
The first annual trade deficit since 1981 calls into question how much longer the country can rely on exports to help finance a huge public debt without having to turn to foreign investors.