The rising yen, which hit a 10-year high against the Euro last Tuesday while also getting stronger against US dollar, has forced Honda to rethink its production strategy.
Honda CEO Takanobu Ito told Japanese daily Asahi that the company plans to compensate by cutting its domestic production by half in the next decade. The move is part of Honda’s plan to sell 80-90% of its vehicles produced globally in local markets so as to be less vulnerable to currency fluctuations.
Honda’s Japanese plants produced 910,000 of its total global output of 3.57 million vehicles in the last fiscal year. The company said it plans to increase its 660 cc kei-car offerings in Japan, as well as keep its domestic production around the 1 million mark, and produce more of its larger models in its overseas factories.
The first such example will be the new CR-V. Honda has already announced last February that it will increase the crossover model’s production at its US plants instead of Japan in order to decrease the financial impact from the unfavorable yen-USD rate.
Story References: Asahi & Reuters
