Nissan head asks Japan PM to weaken yen
Nissan's president says carmaker needs surging currency to be in 'neutral territory'
Don't count Nissan Motor president Carlos Ghosn among those impressed with new Japanese Prime Minister Shinzo Abe's ability to weaken the yen against all major global currencies.
"We are way long from what I consider a neutral territory" of about 100 yen to the dollar, the Brazilian-born president of Japan's second-largest carmaker said during a year-end briefing at Nissan's headquarters in Yokohama, Japan.
"Please bring it back to the neutral territory so that we can do our job without a handicap."
Ghosn's exchange-rate dissatisfaction, echoed by Toyota Motor president Akio Toyoda, underscores the frustrations of manufacturers in a country where the yen surged almost 40 per cent over four years to a post-war high in 2011. While pledges of weakening the currency and stoking inflation helped Abe and his party win a landslide victory in Japan's mid-December elections, currency forecasters predict the yen may strengthen from current levels.
The yen has tumbled more than 10 per cent this year, including a 4 per cent drop in the past month.
Before 2012, it had been the best-performing major currency for three of the preceding four years, undermining Japanese carmakers' ability to compete against US-based General Motors, Germany's Volkswagen and South Korea's Hyundai Motor.
Toyoda, who heads Japan's largest carmaker, said at a separate year-end briefing last month that compared with decades ago, the yen has more than quadrupled.
The exchange rate is at a level that is "beyond what companies can cope with" and continues to hurt Japanese manufacturers, Toyoda said on December 20, speaking as chairman of the Japan Automobile Manufacturers Association.
Ghosn, who made his comments before Abe's swearing-in as prime minister, has led Japanese carmakers in moving production outside Japan in past years to counter the yen's strength. Nissan made three out of four vehicles outside Japan, compared with about half for Toyota, according to data compiled by Bloomberg.
Every one-yen move against the dollar will have a 20 billion yen (HK$1.8 billion) and 35 billion yen impact on Nissan and Toyota's annual operating profits, respectively, according to the companies.
Regarding China, where a territorial dispute with Japan has led to a consumer backlash that has hurt sales of Japanese brands in the world's biggest car market, Ghosn said the company will keep watching the situation.
"If this turmoil is going to have a long-term impact on Chinese consumers shying away from Japanese brands, obviously we will have to reflect it in our long-term plans," he said.