Toyota Motor Corp. on Friday said the company is looking to increase production in North America to offset the surge in the value of the yen that is wreaking havoc on its financial results.
The Japanese automaker is examining a number of options, including producing its Prius hybrid models outside of Japan for the first time and boosting production of Lexus models in Canada, Yoshimi Inaba – CEO of Toyota Motor North America said.
The company said its nine-month net profit fell 57.5 per cent to 162 billion yen (S$2.6 billion), blaming the continued impact of the March 11 disaster, Thai floods and a strong yen.
Mr Mizuno of Mizuno Credit Advisory said the high level of the Japanese currency would continue to be a headache for the company, and one that was difficult to predict.
‘It is concerning that the yen is higher against not only the dollar but also euro,’ he said.
Toyota and others have been building U.S. factories to blunt the negative effects of exchange rates.
Last week the Japanese automaker said it had completed adding a second shift to a factory in Blue Springs, Miss., where it builds the Corolla.
That brings employment at the factory to 2,000 workers and will allow the company to produce 150,000 vehicles there annually.
The Japanese Economy
The Japanese economy shrank in the final three months of 2011, according to the latest data, as exports were hurt by the strong yen and weak overseas demand while flooding in Thailand hammered production.
Gross domestic product shrunk by 2.3% during the period from a year earlier, much worse than 1.4% contraction that analysts had forecast.
Japan’s major manufacturers, such as Sony Corp. to Honda Motor Co., were hit badly during the fourth quarter by a drop in export demand and flooding in Thailand, a regional factory and supply base, which disrupted their production.
On Feb 3, Panasonic, the world’s largest maker of plasma televisions, said that it almost doubled itsannual loss forecast to a record 780 billion yen ($10 billion) because of the Thailand floods andslowing demand for TVs.
FUTURE UNCLEAR: The outlook for Japan’s vital exporters remains unclear because of weak demand in Europe, which is battling a debt crisis, said Masayuki Kichikawa, chief Japan economist at Bank of America Merrill Lynch.