Japanese automakers are suffering as a result of globalisation because depreciating currencies in emerging markets.
The Nikkei Weekly said that, for example, a weak Russian ruble took a JPY9.4bn (US$118.9m) bite out of Nissan’s earnings in the April-June quarter despite the company’s sales in Russia growing by around 20%.
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At the end of June, the Indian rupee and Brazilian real were both down over 20% against the yen from a year earlier; the ruble was down more than 10%, noted the Nikkei.
Suzuki also suffered as the strong yen took a JPY10.9bn chunk out of profit, losing out to a dipping Indian rupee which accounted for almost JPY6bn.
Honda’s earnings apparently shrank by JPY6bn as the real and other emerging market currencies lost ground against the yen.
The Nikkei noted that, having acquired Russia’s Avtovaz with alliance partner Renault, Nissan now hopes to have local parts make up 80% of the vehicles it manufactures in Russia by 2016, compared with about 30-40% now.
Using the local currency as much as possible would reduce Nissan’s exposure to foreign exchange fluctuations.
