JAPAN: Strong yen may force Honda production overseas
Honda is studying possible production bases overseas to replace export-bound car production in Japan to reduce the impact of the strong yen.
Chief financial officer Fumihiko Ike said Honda’s three year plan assumes a rate of JPY80 to the dollar. He added: “Under that assumption the discussion to look for an alternative production base is inevitable."
Honda exports about 30% of the cars it makes in Japan and Ike said those exports were losing money with the dollar trading below JPY80. Earlier today (9 August, 2011) the dollar was around JPY77.40.
Last week Honda posted an unexpected quarterly profit and raised its annual outlook by more than a third as it rebounded quickly from the severe parts shortage caused by the earthquake and tsunami in March.