Honda: "No Currency Advantage" On Weak Yen, Responds to Domestic Lobby

It's an example of the ever-changing global economic conditions that affect the automotive industry: after nearly two years of record-high exchange rates and a major natural disaster in 2011, Japan's plants are back to full strength and the Yen-to-dollar exchange rate has returned to more-favorable 2010 levels. But the American Automotive Policy Council, a trade lobbying group for the U.S.-based automakers, is crying foul and encouraging the Obama administration to take action against the Japanese government for policies it sees as unfairly advantageous to Japanese automakers.

But John Mendel, Honda vice president of U.S. sales, took umbrage to the AAPC's suggestion, saying that the company builds 90 percent of the models it sells in the U.S. in North America, effectively minimizing any currency advantage the company has, according to Bloomberg. Mendel said automakers should focus on vehicle quality and serving the customer, rather than calls for trade wars.

Honda has already become a net-exporter, with its North American plants producing 1.69 million vehicles in 2012, on U.S. sales of 1.42 million. With the addition of a new plant in Mexico which will build the 2014 Fit subcompact, total Honda North American production capacity will rise to 1.9 million units. Honda intends to export as much as 30 percent of its North American manufacturing output.

The only major Japanese automaker heavily reliant on vehicles built in Japan for U.S. sales is Mazda, since production of the Mazda 6 midsize sedan moved from Flat Rock, Michigan to Japan with the introduction of the 2014 model. Mazda is building a plant in Mexico to produce a subcompact model for Toyota, and may source Mazda 3 production for the Western Hemisphere from that plant as well.

Source: Bloomberg

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