Detroit car makers, facing weaker sales and falling market share, have cheered the 13% fall in the US dollar against the euro this year, which has put pressure on prices of imports from rivals, Reuters reported.
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The dollar’s more modest 2% drop against the Japanese yen has helped counter the cost advantage of up to $3,500 per imported vehicle that Japanese manufacturers have against their US competitors, General Motors chief economist Mustafa Mohatarem told Reuters.
“Our competitive position has improved quite substantially,” Mustafa told Reuters. “Because of the very strong dollar over the past two or three years, the US manufacturing sector has been in a recession. Because of the weaker dollar, the manufacturing sector will become more viable in the US.”
The weaker US dollar causes the price of vehicles imported into the United States to rise and forces foreign makers to cut their prices or boost incentives to compete or risk lower sales, Reuters noted.
According to the news agency, Ford, whose Premier Automotive Group divisions Land Rover, Jaguar and Aston Martin are based in Britain, has been encouraged by the British pound’s 11% fall against the euro so far this year.
“With so much of our Premier costs in (British pounds), that has been an uphill battle for us, and I’m delighted to see in the last several weeks that has turned around,” chief operating officer Nick Scheele told analysts last week, Reuters said.
Japanese vehicle makers have moaned about the weak dollar, arguing that it will hurt their hefty profits from the US market, Reuters said.
