Apart from recent well-publicised natural disasters, the big three Japanese car makers have also had to struggle against another life-threatening problem – the strength of the yen on foreign exchange markets which made profits hard to come by.
According to a report from Deutsche Bank, the era of the rising yen has come to an end, and that is great news for Toyota, Honda and Nissan.
The report said over five years the yen went from 117 to the dollar to 79, imposing a price handicap of almost 33 per cent.
“The Yen uptrend is over,” said a report from Deutsche bank, saying the yen would move to 82 to the dollar by the end of 2012 and 90 by 2013’s end.
“The ability of the J3 to keep making profits and generating cash while overcoming this onslaught has been extremely impressive through flexibility of changing business structure, the endurance of the domestic labour force, and broad cost reduction efforts. Investors should remember this when assessing the competitiveness of Japanese automakers,” the report said.
Neil Winton – June 1, 2012
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