TOKYO - Honda Motor Co possible bases abroad study to replace export-bound cars production in Japan by a strong yen affected drawn, a top Executive said on Tuesday.
Japanese auto executives have warned repeatedly that the yen had strengthened about what domestic exporters could handle, but Honda Chief Financial Officer Fumihiko IKE comment so far was the first sign, that it checks any concrete measures to reduce output in Japan.
"We currently have a three-year plan, under which we provided a top speed of 80 Yen to the dollar," said IKE a small group of reporters in the Honda headquarters in Tokyo.
"And under this assumption, the discussion to look for an alternative production base is inevitable."
IKE through his comments and stressed that jobs in Japan had to protected are mitigated, and that the discussion would continue to the point when the Board makes a formal decision taking into account the account of exchange rates at that time.
But he said he was not optimistic that the yen would weaken and that Honda for more appreciation against 70 yen per dollar was bracing, after Japan's solo intervention last week to reduce fall of the dollar Act. The US currency was on Tuesday to 77.00 Yen to retrieve.
"Protection of the Japanese manufacturing and construction will become more difficult cars here," said IKE. "Can we keep the technology here, but if we cars in Japan to create, it would be too expensive, but they can well (quality) products." "And an expensive product is not necessarily a good product."
Under Japan's top automaker third rank is exposed to the least only 30 percent of Japanese cars export excessive domestic production last year. Toyota Motor Corp. exports 53 percent 59 percent, while Nissan Motor Co delivered.
All three automakers have a basic strategy create a natural hedge against currency swings by producing as many cars as possible, in which they are sold. But for smaller markets where the demand is insufficient, is to create a factory production in Japan been focused.
"On these exchange rates, we lose competitiveness on these exports, and this leads to a decline in sales, triggering a vicious circle" IKE said. "And when that happens, the natural result is for the production (in Japan) disappear."
IKE said, Honda, motorcycles, the path had already embarked on expanding production in India, Viet Nam and Indonesia. Honda imported many motorcycles in Japan from Thailand and China.
If Honda makes a similar move with cars, it could put pressure on rivals Toyota and Nissan the same do and lead one of the main drivers of the economy of the country to an erosion of Japanese manufacturing,.
Toyota and Nissan were more vowels than Honda of protecting domestic production with Toyota pledging 3 million vehicles per year in Japan and Nissan pledged 1 million spent.
Nissan said this week that it plans to keep its sales figures in Japan shrinking the 1 million annual production target as it moves more export bound output overseas.
"Automobile manufacturers try hard to reduce costs, to absorb the impact of the currency, but there is a limit to the speed and the amount they can achieve what," Credit Suisse said auto analyst Issei Takahashi.
"Even if they build much in Japan, if they can, by not so you will lose jobs to protect money." "I think it is inevitable that some production shifts overseas."
Copyright 2011 Thomson Reuters.
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