Japanese leaders have been making noises about the Yen's slide against the dollar recently, prompting Detroit to whine about "Japanese interference in the currency market." According to Dow Jones (via CNN Money), the Big 2.8 were spooked by Japanese finance minister Fukushiro Nukaga's statement that his government will "keep watching movements in foreign exchange rates from now on." Japanese currency manipulation has long been one of Motown's pet peeves. The issue is a red herring; the majority of import-branded vehicles sold in the U.S. are made right here in the good old USA. Still, the accusations of sinister foreign forces manipulating international finances in their favor provides politicians with a welcome opportunity to look like they're fighting the good fight for American jobs and businesses. "Please stand up for American companies and workers by warning Japan that the United States will not sit idly by while it interferes in currency markets," wrote Sen. Debbie Stabenow (D-MI) in a not-so-private letter to U.S. Treasury Secretary Henry Paulson. Hey, election campaigns don't fund themselves.
Find Reviews by Make:
Read all comments
What a bunch of nonsense. The dollar has become much weaker, which makes exports from the US cheaper to people in other countries, and makes selling imported cars in the US more expensive for Americans. A weak currency favors the domestic producers.
Edward “The issue is a red herring; the majority of import-branded vehicles sold in the U.S. are made right here in the good old USA”
Do you have the specific facts and data to back this assertion by automaker ? Not challenging you—just would like to know the facts and data….as “majority” could mean 50.1%.
The weak dollar could affect Asian suppliers. Of course, said suppliers serve both American and transplant automakers, so who knows how that breaks down.
I would guess that commodity prices are a much bigger concern to Toyota et al.
Like umterp85, I’d like to see some data to support that statement (I strongly suspect that it is incorrect).
I understand from a comment given in autoblog that according to Automotive News, 70% of Honda vehicles sold in the US are US built; 67% of Nissans are US built and 52% of Toyotas are US built (down from 67% over some indeterminate timeframe).
My thinking is that the drop for Toyota is due to the flexibility of having plants manufacturing cars all over the world, and the increased need of small cars in the US.
Hyundai recently ran into supply issues, with US operations having a need for at least 50,000 additional Elantra and Accent cars but with South Korea unable to suppy them.
Toyota has no such issues. And it is interesting to note that the Yaris and Prius, as well as all Scion cars, are manufactured in Japan.
Nissan manufactures their Sentra and Versa in Mexico, part of the NAFTA, so this leads me to think that in reality, the figures reported to have been given by Automotive News are actually “cars built in NAFTA sold in the US”.
Wish I could lay my hands on the original data, but that is what I suspect.
But, Detroit Inc. is doing its level best to shift blame for their incompetence and idiocy, YET AGAIN, by placing blame where it does not belong.
Detroit Inc whined 25 years ago that the Japanese had an advantage by building cars outside the US and said that once the Japanese were “forced” to build cars here, the high costs would even up the pricing (and they intimated that the “lousy American workforce” would sabotage the quality differences as well). Warning; be careful what you wish for. Japan Inc (and now Hyundai and soon Kia) as well as BMW and Mercedes HAVE built plants in the US and have found the workforce to be fine, and costs to be reasonable and competitive.
Another final point; it was not Japan who screwed up the US economy (and Dollar) to the point of potential economic collapse, it was the “fed”, the Congress of both parties and current and previous administrations of both stripes.
Detroit needs to shut their stupid mouths and get back to work trying to design, build and market decent cars instead of whining and pointing fingers.
menno: Thanks for the facts! Akira Kawahara debunks the whole currency manipulation myth pretty convincingly in his book “The Origin Of Competitive Strength.” It’s also a great read for anyone interested in the details of the decline of Detroit. Kawahara was a “GM Watcher” throughout his time at Toyota and the Japanese Ministry of Transport, and his unique perspective makes wading through his dense prose highly worth it.
And we don’t manipulate the value of the dollar to some extent-that extent being as much as we can? Does anybody know what the Federal Reserve Bank is doing when they change the interest rate the government can “borrow” money at (prime rate), the rate that financial institutions borrow at (fed fund rate), etc.?
I understand several Japanese owned US manufacturing plants are going to start exporting cars from the United States since the dollar has gone so low.
How many US produced V8 powered F150’s, Silverados and Rams do you think the 2.8 could sell in foreign countries, with gas prices ranging from $6 to $10 a (US) gallon equivalent, taxation on engine displacement, and often, small roadways?
I suppose Ford could “try” to export some US built Ford Focuses (Foci?) but these POS’s would be laughed off the forecourt in most other countries as hopelessly “1980’s” outdated junque, and most people would simply demand the “real” Ford Focus built in their own country even if the price were higher.
I understand that in Great Britain during the 1970’s through 1990’s, many British car buyers would demand that their Ford or Vauxhall (nee Opel) should not be built in the UK due to quality problems (real or perceived), but in Belgian or German or even Spanish or Portugese plants. Otherwise, no deal. Eventually, both GM and Ford quit building cars in the UK entirely.
I suppose Ford could “try” to export some US built Ford Focuses (Foci?) but these POS’s would be laughed off the forecourt in most other countries as hopelessly “1980’s” outdated junque, and most people would simply demand the “real” Ford Focus built in their own country even if the price were higher.
Well, then the plant making the current Focus might be scaled up to build the next-gen Focus for export, as well.
They were sniveling about currency in 1980 too.
Since then the J3 have gained ground in the face of a huge negative change in currency value (for them).
Dear Debt3,
Shut up and do something constructive.
The idea of currency manipulation always make me laugh: the $$ is getting cheaper, thus making American exports MORE competitive and imports LESS competitive. That’s why all foreign manufacturers built U.S. plants. Would they do that if it was cheaper for them to build their vehicles in their home countries?
It’s one of the things I disagree with the AutoExtremist on.
That may have been true 20 years ago, but certainly isn’t the case now.
If anything, the lower dollar makes margins much thinner for cars produced overseas and in Canada, as VW and others are currently learning.