Japanese carmakers to reduce reliance on the now-faltering US market
Oct 26 2009 by John Cranage, Birmingham Post
Japanese carmakers such as Honda and Nissan are looking to reduce their reliance on the US market, where weak demand and a falling dollar have slashed profits.
They are also facing severe problems in their home market, as a poor turnout by manufacturers at Japan’s flagship motor show has shown.
No major overseas brands made it to this year’s Tokyo Motor Show while floor space and the number of world premiere car models was half that of the previous show two year ago.
Japan’s car lobby forecasts its new vehicle sales to sink to a 32-year low this financial year as the economic slump exacerbates demand already declining due to a shrinking population, despite efforts by executives to talk the market up.
“A lot of people say a lot of things about the Japanese market, but it’s still a five-million-unit market, number three in the world after China and the United States,” Nissan chief operating officer Toshiyuki Shiga said.
“We need to keep doing our part in drumming up interest here,” he said of the motor show, traditionally considered one of the industry’s five big international shows.
Honda chief executive Takanobu Ito said: “We will need to find export markets other than North America to keep our domestic output levels.”
Nissan chief executive Carlos Ghosn said the company may replace shipments of Japanese-made cars to “dollar countries” such as in the Middle East with cars manufactured in the US, due to the dollar’s weakness against the yen.
Toyota executive vice-president Takeshi Uchiyamada also said the strength in the yen was worrying.
“If the yen continues at this level, shifting some production out of Japan would be something we’d need to look at.”
However, reduced taxes on hybrids and other less polluting cars have helped stem some of the sales slide and have prompted Japanese manufacturers to ramp up their drive into cleaner vehicles to boost growth.
Nissan confirmed for the first time that it would add an all-electric version of the NV200 light commercial vehicle, a sketch of which was unveiled at the Tokyo show.
Mr Ghosn also spoke of new opportunities in the electric car field, after Nissan and trading house Sumitomo announced plans to form a joint venture to recycle lithium-ion batteries after they are used in Nissan cars.
Toyota is also ramping up efforts in developing electric cars. “Hybrid vehicles are becoming mainstream, but Toyota is not putting all of its eggs into this core technology,” group president Akio Toyoda said.
