New yen headache hits Honda Accord in U.S.: Ohio factory to do double duty for export units
Hans Greimel, [link:] Automotive News — December 3, 2012 – 12:01 am ET
… the strong Japanese yen threatens to undercut U.S. sales of the Accord in another way….The Ohio factory that makes Accords will soon churn them out for export to places such as Russia and South Korea, possibly restricting product flow to American dealers….Normally those cars would come from Japan, but Honda has suspended Accord output at home so it won’t lose money on exports.
So … the yen’s strength will mean fewer exports from Japan and more from the US. This surely affects suppliers, too: Honda closing capacity has a multiplier effect inside Japan.
Now I’ve argued that from a long-term perspective Japan has too much manufacturing and will need to shift its labor force composition towards services such as healthcare. But while the economy is in the midst of a modest recession and continues to feel the effects of modest deflation … well, not now, can’t we wait a couple more years?