* Toyota may seek tie-ups akin to Ford hybrid truck deal
* Nissan CEO on yen: "Fix the exchange rate. Fix it."
* Yen hit a record high against U.S. dollar in late Oct.
By Bernie Woodall and Nick Zieminski
Nov 17 The strong yen is forcing Toyota Motor
Corp and Nissan Motor Co Ltd to consider
changes in production plans and alliance strategies, the top
executives of both Japanese automakers said on Thursday.
The yen, which hit a record high against the U.S. dollar in
late October, has undercut profits for Nissan and Toyota, which
both build vehicles in Japan for overseas markets.
To offset the strong yen, Toyota may "deepen alliances"
with suppliers and dealers, President Akio Toyoda said during
the opening of a Toyota plant in Mississippi that will build
Corolla cars now being manufactured in Japan.
At a separate event in New York, Nissan Chief Executive
Carlos Ghosn said the strong yen may force Nissan and other
companies to shift production outside of Japan.
"What's taking place now is many projects are now basing
their manufacturing outside of Japan because they just cannot
survive with this 77 yen to the dollar and they have absolutely
no visibility they're going to get out of (this)," Ghosn said
in a speech at the Japan Society in New York.
So far this year, the dollar has fallen more than 5 percent
against the yen . Since 2007, the dollar has tumbled more
than 35 percent against the yen.
The yen's strength has raised questions about the rationale
of Toyota's commitment to producing at least 3 million cars in
Japan each year. By contrast, Nissan has been more willing to
shift production abroad.
"We need just one thing," Ghosn told the Japan Society in
New York. "Fix the exchange rate. Fix it."
The soaring yen makes it cheaper for Nissan and Toyota to
buy commodities and potentially buy overseas assets. But it
also diminishes earnings from major auto markets such as the
Rather than buy companies outright, Toyota is more likely
to enter partnerships similar to one it entered earlier this
year with Ford Motor Co to build hybrid trucks and SUVs
and develop phone, navigation and entertainment systems, Toyota
Motor Sales President Jim Lentz said.
That deal will allow Toyota to tackle an area of vehicle
technology where it has lagged.
"We are not good at acquiring companies. We are bad at
doing that," Toyoda said when asked whether the strong yen
could trigger a change in the company's acquisition strategy.
"Perhaps we would like to deepen alliances" with suppliers
and dealers, Toyoda said.
Toyoda was in Mississippi to mark the long-delayed opening
of its fourth assembly plant in the United States, which was
originally expected to open last year.
The plant produces about 40 cars per day and eventually
will ramp up to an annual capacity of about 150,000 vehicles,
Toyota officials said. The Corolla is Toyota's second-best
seller in the U.S. market after the Camry sedan.
The new plant will help Toyota battle the strong yen, Lentz
said. The plant, near Tupelo, Mississippi, will largely
displace Corollas now made in Japan. Most Corollas for the U.S.
market are made in Ontario.
About 70 percent of Toyotas sold in the United States,
Canada and Mexico are built in North America.
Toyota's luxury brand Lexus is more exposed to a strong yen
than its mainline brand. As a result, Toyota is considering
making a second Lexus product at a North American plant, Lentz
said. He said it was too early to say when that might happen.
The Lexus RX sport utility vehicle, which this year has
comprised more than 40 percent of the brand's total U.S. sales,
is made in Ontario and is the only Lexus product not made in
"I think over time, we just need to study when it makes
sense for us to bring other volume Lexus products into the
U.S., or North America," Lentz said. "No decisions have been
made, but it's something we're looking at."
Lentz said Toyota would be cautious when making moves based
on the strength of the yen.
"One thing we have to be cautious about and that is the yen
today is extremely strong," said Lentz. "These (production)
decisions take four and five years to pull off. What you don't
want to do is make a decision when the yen is at 75 (to the
dollar) and have it end up at 95 and you've just invested $1
On Thursday, the U.S. dollar slipped 0.1 percent to 76.979