(Corrects the number of places where Nissan (OTC:NSANY) makes cars overseas.)
Nissan Motor Co. Ltd.’s chief operating officer said on Thursday that the company doesn’t make long-term decisions based on changes in currency, even though the sharp drop in the value of the yen has raised concerns about Japan Inc.’s ability to handle the volatility.
Ashwani Gupta’s comments also show that the yen is no longer a simple matter for many Japanese manufacturers.
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In the past, a weak yen was a great thing because it made Japanese goods more competitive on foreign markets and made more money when they were sold in Japan. Today, however, more companies are making their products outside of Japan.
Still, the rate at which the yen has dropped this year has worried policymakers in Tokyo. The yen is at its lowest level against the dollar in 24 years. Wednesday was the clearest sign yet that the government was not happy with the recent sharp drops and was getting ready to step in. [FRX/]
Gupta told Reuters Newsmaker that currency moves were the last part of “the business value chain” when it came to Nissan’s plans. He said, “We don’t make decisions, especially mid- and long-term ones, based on the current exchange rate.”
According to the latest information from Japan’s trade ministry, almost a quarter of what Japanese companies make is done outside of Japan. That’s up from about 17% 10 years ago and less than 15% 20 years ago.
The data showed that in the auto industry, 44% of products are made outside of the United States.
Nissan makes cars in more than a dozen different countries. He said that countries also want it to make more for their markets.
He said that government incentives can help boost this kind of local production.
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Gupta also said that the automaker would be able to handle tighter rules on clean cars in some countries because it has a plan to make both advanced hybrids like “e-power” and battery-electric cars.
He said, “We are ready for anything.” “From the point of view of economies of scale, we use the same e-power train for both e-power and battery electric.”