Nissan to shift output away from Japan
Baku, November 22 (AZERTAC). Nissan is planning to shift the balance of its production and support functions towards dollar-linked economies, including the US and China, to protect itself against currency volatility, the Japanese carmaker`s chief executive has said.
Carlos Ghosn, CEO of Nissan and its French partner Renault, told the Financial Times that they wanted to correct a "big imbalance" in costs and revenues caused by producing cars in Japan to sell in the US and dollar-linked economies in Asia.
"What we [want] to do is shift more of our cost from a yen base to a dollar base," he said. That would not mean closing down facilities in Japan, he added, but that the company could not expand there.
His remarks may fuel concerns among other countries, and Japan in particular, about the effects of loose US monetary policy and China`s currency link to the dollar.
The dollar has lost 10 per cent of its value against the yen this year.
Mr Ghosn said exchange rate volatility of any kind was damaging to business, because it militated against long-term strategy. "The only way you can protect yourself is by making sure your currency footprint is balanced. If there is any imbalance, it should be small."
He contrasted the position at Renault, which is relatively well-balanced in terms of the match between its cost base and its sales, with Nissan, which has "an unbalanced footprint, and the big imbalance is the yen to the dollar".
That means Nissan needs to have more of its factories and administrative costs outside Japan, in the US or dollar-linked economies. Nissan`s expansion in the US is being led by its new Leaf electric car, which will initially be exported from Japan, but from 2012 manufactured, with its batteries, in Tennessee.
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