Toyota Edges Over Hyundai With Weaker Yen
TOKYO (Reuters). When Toyota Motor Corp. President Akio Toyoda visited northern Japan in July last year and announced a $24 million engine plant expansion, some analysts saw it as evidence of a flawed strategy that put patriotism above profitability. At the time, Toyota was struggling to rebuild its supply base after the March 2011 earthquake and tsunami and the yen was climbing toward a post-war record high against the dollar. But the Miyagi Taiwa plant began assembling engines for the small hybrid Aqua, exported as the Prius C, this month with a welcome wind at Toyota’s back: a weakening yen and a government-in-waiting determined to drive it lower. Analysts say a continued slide in the Japanese currency could tip the competitive balance on pricing back in favor of Toyota and away from its toughest and fastest-rising global competitor, Hyundai Motor a new dynamic that would likely be repeated across other Japanese export industries.
Since early October, the yen has weakened about 8 percent against the dollar and 10 percent against the Korean won. Over the same period, shares in Toyota have jumped by 30 percent as investors reacted to the prospect of higher profitability on cars built in Japan for export, including Lexus luxury models. As the yen weakens, that very tight cost structure they have put in place to maximize profitability in an appreciated yen position allows them now to make a lot more profit. With the Korean currency appreciating, I would expect that what you would see (for Hyundai) is some of the same issues that the Japanese faced over the past several years.
About the Author
Daniel Sherman Fernandez www.dsf.my is a service to the public and other website owners. www.dsf.my is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site www.dsf.my. While the information contained within the site is periodically updated, no guarantee is given that the information provided in this website is correct, complete, and up-to-date. www.dsf.my is not responsible for the accuracy or content of information contained inside.
Related Posts
MeatMore And Mortlach’s Happy Work Hour Is For The Discerning Professional →
Ford Backup →
International Dog Day was yesterday. Did you forget? →
