To qualify for Japan’s cash-for-clunker program, new vehicles must meet the 2010 fuel economy standard of 35.5 mpg, making 87 percent of Japanese-made vehicles on sale in their home market eligible for the credit of up to $2,800. In fact, the Japanese program doesn’t even require a clunker (MY 1996 or older) to trade in, although without giving up an inefficient vehicle, the best credit available is a mere $1,132. But the American Automotive Policy Council calls these rules “unfair,” telling the Freep:
We urge the U.S. government to make clear that it cannot tolerate this outright discrimination, particularly at a time when it has provided substantial direct financial support for Japanese automakers in this market
Huh? Is the AAPC talking about America’s cash-for-clunker program, which (like Japan’s) sent Honda and Toyota sales soaring? Or the $1.6b DOE “ATVML” loans that Nissan got, which were dwarfed by the same program’s generosity towards Ford? Or perhaps the $82b+ TARP bailout that… oh wait, that all went to Detroit. Ok, let’s forget about America’s “substantial direct financial support for Japanese automakers” for a second and figure out just how unfair this Japanese program is.
Asiaone Motoring reports that Toyota are now pushing forward on their constructions of plants in the United States and China which had previously been put on hold. It should come as no surprise that part of the reasoning behind this decision is to meet growing demand in China. More importantly, Toyota needs to protect itself from the strong yen, a consideration that now apparently outweighs weakness in the US market. The report says that Toyota is expected to invest and additional 100 billion yen (about $1.1b) to get these plants completed. Although these plants will increase capacity by 200,000 units, Toyota plan on halting production on lines in Japan and the UK, as the firm must still reduce capacity by 1 million units in order for this investment to work. Though the move is a clever one, it highlights the enormous pressure the world’s number one automaker finds itself under: overcapacity is bad enough, but when so much of its production is based in Japan, it deal with reduced production while paying for expansions in cheaper production zones. The upside? This plan could lead to US production of the Prius at the under-construction Mississippi plant sooner than expected.
No kidding. As it has been pointed out by TTAC’s Best & Brightest, Suzuki has what other makers need, and Suzuki needs what other makers have. Read More >
Toyota had slammed hard on the brake when it came to capital expenditures. So hard that ToMoCo (and Sony) were rapped on the knuckles by the Japanese Ministry of Finance for hobbling Japan’s economy. Suddenly, Toyota starts pouring concrete and installing machinery again. Not because of newfound faith in the auto market in general. Two factors made them do it: The Yen has become so expensive that manufacturing in the USA is cheaper. And China is gobbling up cars faster than Toyota can make them.
According to the Nikkei [sub], a Toyota plant in the US and one in China will increase ToMoCo’s annual output capacity by 200,000 units before the Japanese 2010 fiscal ends on March 31, 2001. The construction will cost Toyota a little over $1b, depending on the vagaries of the greenback and its pegged follower, the Chinese Yuan. Here are the blueprints: Read More >
What, GM actually has the money to BUY companies? Suzuki says they want sell the whole shebang in their 50:50 joint venture in Canada to their JV partner, General Motors, says the Nikkei [sub]. That would be the end of a more than 20-year marriage. Read More >
Mitsubishi Motors and PSA sure don’t waste any time. Hours after the news of their impending nuptials were announced, the happy couple retreated to a love hotel in the Kabuki-cho district of Shinjuku and hatched further plans on top of their planned capital tie-up. Read More >
Renault has its Nissan. Jealous PSA seeks the company of a pretty Japanese bride of its own. Mitsubishi Motors Corp. confirmed to theNikkei [sub] today that it is in talks with PSA Peugeot-Citroen about some financial shibari. The capital tie-up could see PSA take a majority position in Mitsubishi Motors.
“We have been talking whether we can have deeper relationship, and a capital tie-up is one among many options,” said a Mitsubishi Motors spokesman, declining to comment on the scale or value of any potential deal. The Nikkei [sub] reported earlier Thursday that PSA could buy a stake of 30 percent to 50 percent in Mitsubishi Motors and become its biggest shareholder. Read More >
If you are a daily reader of the Nikkei, as we are in the Schmitto-san household, you can sometimes lose your confidence in Japanese precision and accuracy.
Yesterday, we quoted the Nikkei as saying that “sales of new cars and trucks rose 36 percent year on year to 293,410 units in November, marking the fourth straight month of increase, the Japan Automobile Dealers Association said Tuesday. Passenger car sales surged 43.8 percent to 268,450 units.”
Today, we read in the Nikkei that “new-vehicle sales increased 18.3 percent to 436,535 units in November for a third straight year-on-year gain, according to industry data released Tuesday.”
You have to hand it to the Japanese. They have their numbers down pat. Which country knows on December 1 how many cars they have sold in all of November? Japan does. And guess what: Sales of new cars and trucks in Japan rose 36 percent year on year to 293,410 units in November, says the Nikkei [sub], quoting numbers released by the Japan Automobile Dealers Association. And guess what again: This is the fourth straight month that Japanese car sales have been increasing. Hold on, there is more … Read More >
Japans currency rose to a 14-year high against the dollar last week, prompting fears that the island nation’s exports could be dramatically affected. And no firm stands to lose as much Toyota, which had been operating under the highest assumed exchange rate of any of Japan’s auto exporters. Reuters reports that ToMoCo had pegged the rate at 90 yen to the dollar, some five yen higher than rivals Honda and Nissan. With the Yen trading at 86.29 to the dollar, that assumption could add up to big losses: Toyota reckons that for every one yen drop against the dollar, operating profits will decline some 30b Yen due to the fact that it exports over half of its Japanese-made automobiles, most of which head to market in the US. Aizawa Securities analyst Toshiro Yashinaga explains that Toyota, more than any other Japanese firm, is riding the razor’s edge.
Carmakers that issued big profit warnings last year have set cautious forex assumptions this time, so roughly speaking the current rates are within expectations. But there are views that the dollar could sink even further in 2010, to the 70s (yen), and in that sense Honda and Nissan, which are relatively strong in emerging markets, are in the winning camp
Japan’s government has thus far resisted calls to intervene in the Yen’s exchange rate. As if Toyota’s heavy exposure to the moribund US market weren’t bad enough, exchange rate uncertainty could make Toyota’s second-straight loss even worse than expected when the firm announces its fiscal year-end results in March.
Lithium is known as a reliable treatment of depression. A double dose of lithium with a touch of cobalt is now prescribed by Nissan to cure range anxiety and other assorted phobias afflicting owners of plugins. The Nikkei [sub] writes that Nissan “has nearly completed development of a lithium ion battery that can power an electric vehicle for 300km on a single charge, about double the capacity currently possible.”
Nissan hopes to sell cars powered by the Energizer-bunny of all plugins by 2015.
For manufacturers of engine timing chains, main bearings or any of the hundreds of unique components for engines and transmissions, EVs like the Nissan Leaf pose an enormous threat. Decades of investment in the manufacturing technologies and IP are potentially rendered irrelevant if the switch to battery-powered EVs progresses at the rate that its optimists proclaim. Bloomberg tells the tales of woe from anxious Japanese suppliers: “It’s a crisis-like situation,” said Toru Fujiwara, head of Tsubakimoto’s auto-parts division. “With electric cars, there’s no way we can apply our current technology.” Especially when their current technology lacks AC or DC. Read More >
Reuters reports that Japanese manufacturers are running scared from Hyundai-Kia. A combination of a rising Yen and South Korea sealing more and more free trade agreements with other countries has helped Hyundai-Kia immensely. Of course, copying Toyota’s business model of building reliable cars at affordable prices has helped greatly, too. All this momentum from South Korea is getting Japanese car executives a little bit nervous. “I think there’s a sense of crisis in the whole (Japanese) industry,” Toshiyuki Shiga, chief operating officer at Nissan Motor. “Whether you take the Free Trade Agreements or foreign exchange policy, I get the impression that South Korea is tackling things well.”
After months of teases and race-car previewing, Toyota is publicly unveiling its production-spec LF-A supercar at the Tokyo Auto Show [via Automotive News [sub]]. And it’s a legitimate front-engine supercar, with a 4.8 liter V10 motivating it to 60 MPH in 3.7 seconds. It even has a true supercar pricetag: $375,000. But how does this car square with Toyota’s appliance-and-environment-driven image? “It’s our mission as automakers to offer cars that possess the ‘fun’ spirit that should be at the base of any car,” explains Akio Toyoda, who sees the supercar as a way to gain attention in developing markets. But having axed its own front-engine V-10 supercar, Honda is reacting to the LF-A by retreating into greener-than-thou sniping. “Sure, there are folks who like that ‘vroom’ of the engine out of nostalgia,” snickers Honda prez Takanobu Ito. “The era of V10 engines is gone.” And you’ll never guess what vehicle Ito offers up as Honda’s counterpoint to the LF-A.
Since it’s shaping up to be Luxury Sedan Day here at TTAC (actually, it’s water-heater explosion day here at TTAC West, but that’s another, less-interesting story) we thought we’d show you Toyota’s Mark X [via Autocar], a sedan it figures could be a budget competitor to the BMW 5 series. But rather than getting hung up on what Toyota wants this car to be, let’s take a look at what it actually is: a Toyotaized version of the GS-series Lexus. This is the same strategy Toyota has taken with its HS250h, offering a JDM-only Toyota version of a Lexus product, although the Mark X’s differences go beyond a cheaper interior. Detuned versions of the 2.5 and 3.5 liter V6s found in the IS-series are offered as engine choices, in hopes of not intruding too much on the GS’s territory. And though none of this is likely to impact the US market, it’s worth noting that this is a questionable strategy at best. Lexus has succeeded in this country because of Toyota’s diligence in differentiating them from pedestrian T-branded offerings. If Toyota ever gets the brilliant idea of offering quick-and-dirty, down-economy rebadges of Lexus vehicles, it will find itself in a GM-sized branding nightmare before it can say “Buick.” And don’t think for a second that nobody at Toyota is thinking of making this the next Toyota Avalon. Just say no!
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