Japanese Car Makers Reducing Production In Japan

Posted by Stephen On Saturday, February 26th, 2011

Perhaps in response to the recent strength of the Yen and the availability of cheap foreign labor in growing markets but also, I am sure, with an eye on the longer-term future which will see the Japanese workforce contract as Japan’s society ages, the Japanese car makers are reducing production in Japan and moving more of it offshore.

In January 2011, only Mitsubishi out of the 8 major car makers in Japan did not see a drop in production. And these falls in production are not insignificant: Honda was down 10.7% and Suzuki13.1%.

This is the lowest level of production in January since these figures started to be collated in 1997. On the other hand, it is also worth noting that 1997 was the year which saw the highest level of new car sales in Japan, so it is not surprising that the production figures are down from the 1997 peak.

I wonder also whether Toyota et al are making the same mistake that Detroit did in the 1960s and 1970s: Looking down on their overseas competition and only pulling up their game when it was too late?

Korean manufacturers in particular have made huge strides in the last decade, with the Chinese poised to be the next wave behind them. And then you can see revived European makers focusing on diesel technology that the Japanese are behind on (seemingly because diesel engines are not popular in passenger cars in Japan) and building them into hybrid cars that look set to pass the 100 MPG mark with ease in the next few years.

Only time will tell, but are the Japanese car makers in decline?

Additional source: Kahoku (Japanese-language)

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