Toyota may shift to foreign production

• Source: Global Times
• [08:45 January 17 2011]
• Comments

Toyota Motor will consider shifting factories overseas if the yen stays high and puts pressure on its profits, the company president said last week.

"We do not wish to relocate production sites because of currencies and foreign exchange alone," Akio Toyoda said in a Japanese-language online message dated Friday.

However, he added, "If profits cannot be generated" despite efforts toward efficient, good-quality manufacturing and training, "we have no choice but to consider relocation of production sites as a real possibility."

Japanese exporters, led by automakers and electronics producers, have come under pressure from the rising yen in recent months.

A strong yen makes Japanese exports relatively more expensive in foreign markets, while shrinking the value of Japanese firms' overseas earnings when repatriated.

Meanwhile, Japanese automakers have been shifting more of their production and sales to other countries, particularly to growing Asian markets.

Toyota Motor had already announced in late 2010 a plan to reduce domestic production while boosting output in foreign countries in 2011.

"Unfortunately, we have to brace ourselves for more difficulty and uncertainty to come, like last year," Toyoda said in his message.

AFP