Domestic auto production has largely recovered from disruptions caused by the March 11 Great East Japan Earthquake, but the outlook is clouded by the yen's sharp appreciation.
Domestic auto production has largely recovered from disruptions caused by the March 11 Great East Japan Earthquake, but the outlook is clouded by the yen's sharp appreciation.
The combined output at Japan's eight automakers rose 1.6 percent from a year earlier to 670,837 vehicles in August, posting the first year-on-year increase in 11 months, according to company figures released Sept. 28.
The auto industry has recovered steadily since April, when domestic production plunged 60 percent from a year earlier after the magnitude-9.0 earthquake paralyzed parts supplies.
Now, a spike in the value of the yen, coupled with the European sovereign debt crisis, is casting a shadow over domestic vehicle production.
Toyota Motor Corp. has lowered its domestic production plan for October and November, with a top executive citing deteriorating export earnings due to the strong yen.
The nation's top automaker has told parts suppliers that it plans to build 655,000 vehicles during the two months, down 10,000 units, or 1.6 percent, from its previous plan presented a month earlier, according to sources.
Toyota plans to increase overseas output instead and maintain overall global production levels for October and November at about 1.6 million vehicles.
Nissan Motor Co. will lose 20 billion yen ($262 million) in annual operating profits for every 1-yen gain in the value of the Japanese currency against the dollar.
A strong yen squeezes automakers' overseas earnings in foreign currencies when they are repatriated in yen.
In August, Toyota built 252,374 units in Japan, up 11.9 percent from a year earlier for the first increase in 12 months. Its domestic output had halved from 2010 in May.
Honda Motor Co. produced 56,356 units, still 17.2 percent less than a year earlier. But the company plans to assemble 20 percent more vehicles than in 2010 from October.
Nissan's domestic production totaled 89,262 units, for the first year-on-year fall in four months, due partly to high production levels in August 2010.
(This article was compiled from reports by Ken Miyazaki, Takeshi Narabe and Seisaku Yamamoto.)