* Strategy reversal possible if yen strong after 6
* Current dollar-yen rate 'abnormal', can't last - CEO
* Ghosn asked PM Noda for govt help with strong yen
(Adds details, comments)
By Chang-Ran Kim
KANDA-MACHI, Japan, Sept 20 Nissan Motor Co
may need to rethink its strategy of building at least 1
million vehicles a year in Japan if the yen is trading around
today's levels in six months' time, CEO Carlos Ghosn said on
Despite the yen's historic strength and the losses it has
forced on exports, automakers such as Nissan and Toyota Motor
Corp have pledged to keep a minimum level of production
at home to protect Japanese manufacturing and in the hope that
the yen will weaken.
But the dollar has stayed below 80 yen for months, stoking
fears of a hollowing out of manufacturing as companies look for
cheaper production sites abroad.
"If six months down the road we are still in this situation,
this is going to provoke a major rethink of our industrial
strategy," Ghosn told reporters at Nissan's factory in Japan's
southernmost main island of Kyushu, calling the current
dollar-yen rate "abnormal".
"But personally I don't think this is going to be the case.
I don't think (the current exchange rate) is sustainable for the
economy, for Japan, for the industry.
"So we (will) stick with our 1 million cars in Japan because
we believe in common sense and we believe that at the end of the
day, nothing abnormal will remain abnormal and long-term trends
will prevail," he said.
Ghosn stopped short of saying what he considered a "normal"
dollar/yen level that could protect Nissan's commitment to
Japan, but said 100 yen seemed to be the consensus inside the
Japanese auto industry.
The dollar was far from that on Tuesday, trading around 76.5
Ghosn made his remarks at Nissan Motor Kyushu, which Nissan
has spun off as a separate company to eventually cut wages and
make the factory more competitive.
The move is among many that Nissan - and others - are taking
to overcome currency headwinds to compete against rivals such as
South Korea's Hyundai Motor benefiting from a
relatively weak won currency.
Ghosn said Nissan Motor Kyushu will aim to raise the ratio
of parts procured within Kyushu and neighbouring Asian countries
to 80-90 percent from 70 percent now to make use of a strong
The 530,000-vehicles-a-year factory will also begin building
a new series of high-volume compact cars next year that will
help Nissan boost its market share in Japan to 15 percent in
2013, he said.
"This new company, Nissan Motor Kyushu, will help our
manufacturing stay competitive in Japan and keep our goal of
domestic production of a minimum 1 million units annually,"
Ghosn said at the company's opening ceremony.
Ghosn met with Prime Minister Yoshihiko Noda on Monday,
showing him around Nissan's Yokohama factory, which produces a
high-value motor for electric cars, and sought the government's
help in reining back the yen.
Noda's cabinet agreed on Tuesday a list of subsidies and
loan guarantees to offset the pain that some companies are
feeling from the strong yen, but this caused little stir in the
Japan has also said it will take its complaints about the
strong yen to a Group of 20 finance ministers' meeting this
week, but it remains to be seen how sympathetic other countries
will be with Europe's debt crisis likely to dominate the agenda.
Last week, Ghosn said the next generation of high-end
Infiniti cars, which are not sold in Japan, would be built
outside the country. Nissan had already decided to shift
production of the Infiniti JX sport utility vehicle (SUV) to the
United States in 2012 from Japan.
(Editing by Michael Watson)