Nissan and Toyota to cut production in Japan

Japanese carmakers have been complaining about rising cost for a while, in fact every time a Japanese company hiked prices in India, they have cited about rising Yen as one of the reasons. The same problem has also impacted their profit margins in the country and many Japanese carmakers are now planning to move production outside Japan. 

Toyota Motor Corp has announced it will move the production of the Yaris to their French facility, from there it will be shipped to the west of Atlantic. The company also confirmed plans to reduce production by 5,00,000 units by 2014, from current 3.6 million units per annum. Nissan is also stall one of the production line in Japan to cut production by 2,40,000 units, although the company plans to use the facility to develop new cars.

The impact of strong Yen has been sever – Honda has stopped operating the Saitama facility on every Friday to control production. The easiest way to tackle this problem for most manufacturers is to move production to facilities outside Japan. The companies are looking at countries like Brazil, China, Russia, Thailand and even India due to low production cost and other incentives. Nissan along with Renault has already set-up an export hub in India, Toyota has started exporting the Etios twins to South Africa and may add more countries to the list soon, also Honda is also building a new facility in Rajasthan that might as well be used for exports.