By James Santagata
Principal Consultant, SiliconEdge


Japan is like a supertanker laden with oil.

It's very valuable but its contribution is often underappreciated or even unappreciated.

It's slow to turn, hard to maneuver but it's buoyant and true.

And once it gets moving and its course is set you better get out of its way. :)

In case you missed it, TBS ran a very good drama called Leaders which covered Toyota's founding as an automotive design and manufacturing company and their revolutionary transition from weaving looms to becoming an international automobile giant.

The DVD is coming out August, 8th.

By COLUM MURPHY
SHANGHAI--Nissan Motor Co. 7201.TO -0.39% is considering a new plant in North America to produce at least 100,000 of its premium Infiniti vehicles a year, likely starting in 2017 as the auto maker fans out production globally from Japan.

"One of the challenges we face is that we really do not have a diversified geographical footprint for manufacturing," Infiniti Motor Co. President Johan de Nysschen said Sunday.

Apart from producing one model in the U.S. for global consumption, the Infiniti brand's current production was "totally concentrated" in Japan, he said.

But that is changing. In May 2012 the company announced plans to produce two Infiniti models for the Chinese domestic market in Xiangyang, Hubei province, with Nissan's local partner, Dongfeng Motor Co. Mr. de Nysschen said more details will be announced around the Shanghai auto show, which officially starts April 21.

In addition, premium compact models for the global market will be produced at Nissan's Sunderland plant in the U.K. starting in 2015.

Nissan has been the most aggressive of Japan's Big Three auto makers to shift production outside of the country during recent years. That stems from an effort to lower Nissan's exposure to the yen, make more cars in the markets where the company sells them, and adjust to the rapidly shrinking Japanese vehicle market.

The yen has weakened against the U.S. dollar recently, but only after a run to a strengthening to a record level in October 2011. A strong yen hurts the price competitiveness of Japanese exports and reduces the value of profits earned abroad when they are returned home.

Thanks to an obsessive emphasis on quality, Toyota Motor grew from a tiny spinoff of a Japanese loom manufacturer in the 1930s into the world’s largest automaker. Chief Executive Officer Akio Toyoda has nothing more virtuous than Japan’s weakening currency for a recent assist in his quest for even greater market-share dominance. The yen has fallen 16 percent against the dollar since Oct. 31. That gives Toyota and other Japanese carmakers a financial gain on every car, which they can use to cut prices, boost advertising, or improve their vehicles in ways not open to U.S. rivals.

Morgan Stanley estimates the currency boost to operating profits at about $1,500 per car, while Detroit carmakers put the figure closer to $5,700. “We’re concerned about what the long-term ramifications are,” says Joe Hinrichs, Ford Motor’s Americas chief. Sergio Marchionne, CEO of Chrysler Group and Fiat, also frets about the impact. “We didn’t need this, to put it bluntly,” he told Bloomberg TV on March 5. “It’s going to make life tougher.”

Toyota in February raised its profit forecast by 10 percent for the fiscal year ending March 31 to 860 billion yen ($9 billion), a five-year high. That would more than double the previous year’s profit and signal a convincing comeback from the global recalls and 2011 Japanese earthquake that shook Toyota’s standing as a leader in earnings, sales, and quality.

Detroit automakers are watchful for a replay of the 1990s and 2000s, when a weak yen allowed Japanese automakers to offer American buyers cars loaded with extra features at prices U.S. companies couldn’t match. It took government-backed bankruptcies at General Motors and Chrysler in 2009 and a wrenching restructuring at Ford to get their costs in line with Toyota’s. Those gains are being eroded by the currency shift, says Morgan Stanley auto analyst Adam Jonas. “This is, without a doubt, the biggest change affecting the global auto industry,” Jonas says. “The dollar versus the weak yen will make the Japanese automakers richer, and they can use those profits to target more aggressive growth. Ford and GM are in their bull’s-eye. This is a real threat.”