Japanese carmakers cut costs and reduce capacity to cope with the appreciation of the yen

Geely Automobile reported that foreign exchange rates continued to rise against the foreign currency. On August 9, the Japanese exchange rate once again hit a record high of 85.58 against the U.S. dollar for 15 years. Since this year, the yen has risen 8% against the dollar and 14% against the euro. The rise in the yen against the foreign exchange rate will undoubtedly bring about an increase in the export costs of Japanese products.

As the largest imported brand in the US automotive market, Toyota Motor is trying to reduce the production costs of its models such as Yaris and Corolla to offset the negative impact of the appreciation of the yen.

The rise in the exchange rate of the Japanese yen has greatly increased the export costs of automobiles and thus reduced the attractiveness of exports. Atsushi Niimi, vice president of global production at Toyota Motor Co., said: “At current exchange rate levels, this business model that is produced in Japan and exported to Japan is no longer suitable for us. To maintain the attractiveness of exports, we are working hard to reduce Yaris. Corolla's cost."

In addition to cutting costs, Toyota Motor Corp. and Toyota Japan’s domestic rival, Nissan Motor Co., are considering shifting domestic production capacity from Japan to Japan to cope with rising export costs resulting from the appreciation of the yen.

Nissan CEO Ghosn said in an interview recently that if the yen continues to appreciate, Nissan will have to adjust the capacity of its domestic factories in Japan and may reduce the capacity of its domestic factories in Japan by 20% in October.

Toyota plans to reduce the annual capacity of its domestic factories in Japan to the current 70% and increase its production capacity in factories in China, Brazil and the United States. At present, the annual production capacity of Toyota's domestic factories is about 3.9 million.