Toyota Motor Corp is considering building more plants in the United States mostly because of unfavorable strong yen and low demand for new vehicles in Japan.
“If demand in Japan recovers, we will continue and work to maintain production of 3 million units” in Japan, President Akio Toyoda was quoted as saying by Bloomberg last week.
“If most of it becomes exports, shifting a significant amount of production to the U.S. may be considered.”
For the maker of the Prius hybrid, every one-yen rise against the dollar can wipe tens of billions of yen from annual operating profit. In the year ended March, Toyota made around half of its cars in Japan, more than rival Nissan.
The yen was trading at about 76.8 yen to the dollar on Friday, compared with 90 yen two years ago. The euro is down to 104 yen, compared with 134 yen in November 2009, reducing the value of overseas revenues brought home to Japan by exporting companies.
Bloomberg reports that Japan’s exports fell for the first time in three months. Shipments dropped 3.7 percent in October from a year earlier, the Ministry of Finance said today in Tokyo, worse than all 29 estimates of economists surveyed by Bloomberg News.
Japan has intervened in foreign exchange markets three times this year, most recently on 31 October.
Carmakers are often the most affected by the strength of the yen, as they are major exporters.