Japanese giants look overseas
Source: Agencies |
November 19, 2011, Saturday
|
Print Edition
Print Edition
JAPAN'S big manufacturers, led by Panasonic Corp and Nissan Motor Co, are speeding up their shift overseas, in a sign corporate Japan sees the strong yen as a long-term handicap rather than a temporary blip.
A sluggish home market and energy shortages following the widespread nuclear power shutdown sparked by the March 11 earthquake and ensuing atomic crisis are also tipping the balance toward investment abroad.
Panasonic is planning its first solar factory outside Japan, sources said yesterday, while Suzuki Motor Corp said it was seeking to double auto production at its joint venture in China by 2015. Rival automakers Toyota Motor Corp and Nissan also said exchange rates were forcing them to consider changes in their own production plans.
The Japanese currency was trading at about 77 yen to the dollar yesterday, compared with around 90 yen two years ago.
The euro has tumbled to about 104 yen, compared with about 134 yen in November 2009, slashing the value of overseas revenues brought by export-reliant firms. Producers say there is little prospect of increasing procurement in euros to offset the pain.
Panasonic, for example, has said the strong yen will cut annual operating profit by 28 billion yen (US$363 million) this year. Panasonic's new solar plant in Malaysia is set to cost 40-50 billion yen, according to sources.
Nissan Chief Executive Carlos Ghosn has called for fixed exchange rates and said the company may be forced to shift more of its manufacturing overseas.
"We need just one thing," he said. "Fix the exchange rate. Fix it."
A sluggish home market and energy shortages following the widespread nuclear power shutdown sparked by the March 11 earthquake and ensuing atomic crisis are also tipping the balance toward investment abroad.
Panasonic is planning its first solar factory outside Japan, sources said yesterday, while Suzuki Motor Corp said it was seeking to double auto production at its joint venture in China by 2015. Rival automakers Toyota Motor Corp and Nissan also said exchange rates were forcing them to consider changes in their own production plans.
The Japanese currency was trading at about 77 yen to the dollar yesterday, compared with around 90 yen two years ago.
The euro has tumbled to about 104 yen, compared with about 134 yen in November 2009, slashing the value of overseas revenues brought by export-reliant firms. Producers say there is little prospect of increasing procurement in euros to offset the pain.
Panasonic, for example, has said the strong yen will cut annual operating profit by 28 billion yen (US$363 million) this year. Panasonic's new solar plant in Malaysia is set to cost 40-50 billion yen, according to sources.
Nissan Chief Executive Carlos Ghosn has called for fixed exchange rates and said the company may be forced to shift more of its manufacturing overseas.
"We need just one thing," he said. "Fix the exchange rate. Fix it."
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