TOKYO Nov 30 Japanese automakers unveiled
futuristic concepts such as car-powered houses and rechargeable
sports cars at the Tokyo Motor Show, but the stubbornly strong
yen cast a pall over the industry, threatening their chances of
keeping the lead in next-generation technology.
The biennial auto show, which opened to the media on
Wednesday, showcased the usual array of green cars such as
electric vehicles (EVs) and fuel-cell cars, while top Japanese
brands went further to depict how cars could eventually link up
to the grid and store energy in their batteries as a power
The idea of capturing solar power or unused and cheaper
nighttime electricity in cars to power households has gained
traction in Japan after the March 11 earthquake and tsunami cut
off power to millions of households and triggered a nuclear
But the prolonged strength of the yen, at around 78 to the
dollar now, has eroded profits in Japanese automakers' domestic
market, hurting competition against rivals such as South Korea's
Hyundai Motor Co and Germany's Volkswagen AG
"The biggest worry I have right now is, yes, Japanese
automakers have a lot of excellence in technology and
manufacturing, but will they keep that excellence?" said
Christopher Richter, an auto analyst at CLSA Asia-Pacific
"Building new technology requires money. If you're
cash-starved, your global competitors aren't going to cut you
any slack from the difficulties in Japan. If (Japanese
automakers) don't change, there's going to be a slow erosion of
competitive advantage which they can ill-afford."
Japanese car makers are wrapping up a year of unprecedented
challenges including the disasters at home and disruption also
from the Thai floods, but the yen's appreciation against
virtually all other currencies has posed the biggest headache.
'HELP US STOP THIS'
Japan is known for its expertise in "monozukuri", or
manufacturing, and is also a breeding ground for high-tech
parts, especially in electronics from makers such as Denso Corp
-- strengths that executives from Volkswagen and BMW AG
acknowledged in Tokyo this week.
But executives have also warned that without a reversal in
exchange rates, they would be forced to reduce exports from
Japan, which would then slash overall production because the
sliding domestic market cannot make up the difference.
"Our base and our roots are in Japan, and our strengths are
in Japan. So we have absolutely no interest in moving out,"
Nissan Motor Co CEO Carlos Ghosn told reporters.
"That's why we're talking to the government -- we're saying,
'Help us stop this.'"
Ghosn went on to give an impassioned warning that the strong
yen would ultimately hurt the country more than it would hurt
Japanese car makers, which had the option of shifting operations
abroad. If Tokyo continued without strong action on the yen, he
said, half of the 4 to 5 million Japanese jobs responsible for
exported vehicles could be at risk.
Ghosn, who also heads Renault SA, said Tokyo could
learn from Switzerland, which had succeeded in stemming the
Swiss Franc's rise as investors took flight from the euro.
"Switzerland is a great benchmark about how a small country
-- much smaller than Japan -- at a certain point in time they
drew a line in the sand and they said, 'Enough is enough'.
Everybody laughed, but they prevailed."
Nissan was profitable in every region in the world except
Japan, Ghosn said, noting that the yen's current level was
unreasonable and a "handicap". Its bigger rival, Toyota Motor
Corp, is losing about $3 billion a year in Japan.
(Editing by Joseph Radford)