Japanese automakers have had a tough go in North America the past couple of years, but that’s not stopping brands such as Lexus from considering increasing North American production. According to a report in Ward’s Auto, the Japanese luxury automaker may expand its U.S. production beyond the Lexus RX that is currently produced here. Group vice president and general manager of Lexus, Mark Templin, said “we’re probably having more serious conversations now than I’ve seen in the last 22 years.”
A strong Japanese yen hasn’t helped things either. Automakers like Lexus that manufacture in Japan and sell in places with weaker currencies such as the U.S. are seeing a dip in returns. Toyota has mitigated some of the revenue swings with U.S. production of many of its popular North American vehicles, such as the Toyota Camry. Honda has publicly said the strong yen has hurt its bottom line. So it would make sense for Japanese automakers to expand production here.
Tsuyoshi Ueno, senior economist at the LNI Research Institute in Tokyo, said in a recent New York Times article “upward pressure on the yen is likely to continue for some time, and even if the yen were to weaken temporarily, there would be no change to the fact that every time the global economy worsens, the yen strengthens.” Now could also be a good time to invest in facilities and production, with tepid real-estate values still a reality for much of the U.S., no shortage of people willing to fill jobs, and with the purchasing power of the strong yen converted to dollars.
Source: Ward’s Auto, Lexus