1 Feb

Honda Defensive on Detroit Lobby Criticism of Weak Yen Advantage

A little greater than a year ago, Japanese automakers, within the aftermath of the devastating April 2011 earthquake and tsunami, were adjusting profit forecasts downward on supply disruptions and a powerful yen. Now, the tables have turned, and an unusually weak Yen has made Japanese exports cheaper. The yankee Automotive Policy Council, a lobbying group for the Detroit Three, is urging the present administration to take retaliatory actions against the Japanese government’s policies looked as if it would keep the valuation of the Yen low.

But John Mendel, Honda vp of U.S. sales, took umbrage to the AAPC’s suggestion, saying that the corporate builds 90 percent of the models it sells within the U.S. in North America, effectively minimizing any currency advantage Honda has, in accordance with Bloomberg. Mendel said automakers should specialize in vehicle quality and serving the buyer, instead of requires trade wars.

Honda has already become a net-exporter, with its North American plants producing 1.69 million vehicles in 2012, on U.S. sales of one.42 million. With the addition of a brand new plant in Mexico with a view to build the 2014 Fit subcompact, Honda’s total North American capacity will rise to one.9 million units.

The only major Japanese automaker heavily reliant on vehicles inbuilt Japan for U.S. sales is Mazda, since production of the Mazda 6 midsize sedan moved from Flat Rock, Michigan to Japan with the introduction of the 2014 model. Mazda is building a plant in Mexico to provide a subcompact model for Toyota, and might source Mazda 3 production for the Western Hemisphere from that plant besides.

Source: Bloomberg