Nissan is reportedly looking to reduce exports from Japan to soften the negative impact from the strong yen. However, the automaker hopes to sell one million vehicles this year, so Nissan is still looking to boost production for the domestic market.
Under the recently announced Power 88 business plan, Nissan is aiming to have an operating-profit margin of 8% and global market share of 8% for the next six years. A shift in production will be necessary to maintain those lofty goals.
“We’ll maintain a production volume of one million vehicles in Japan by using [domestic production] as our manufacturing center to enhance our competitiveness,” Hiroto Saikawa, a Nissan executive vice president, said at the company headquarters in Yokohama, south of Tokyo.
For Nissan and other Japanese car makers, the yen’s strength remains a challenge. A strong yen reduces the price competitiveness abroad of vehicles built in Japan and also deflates income from overseas markets when repatriated.
Despite the disadvantages of building vehicles at home, Japanese automakers are expected to keep production in Japan. Many believe that advanced manufacturing technologies and skills owned by their home factories and suppliers will help build more competitive vehicles.
Production levels will also be maintained due to the arrival of new models, including a new compact, electric vehicles, and other green cars. While these models may not be ultra competitive abroad due to the stubborn strength of the yen, new models are still expected to help boost sales in Japan and abroad.
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