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While
Ford, GM, and Chrysler are struggling in
the U.S., with many factories shuttered
and more closings on the way, Japanese manufacturers
are adding capacity in their home country.
The changing fortunes are partly due to
current market trends, but it also has some
observers wondering if the idea that Japanese
manufacturers need to produce cars in the
U.S. is running out of steam.
Honda
is opening its first plant in Japan in 30
years, while Toyota is adding significant
new capacity there to produce engines for
its high end vehicles worldwide. Even Nissan,
which has struggled more than its two Japanese
rivals, is also expanding domestic production
capacity.Behind the changes are at both
ends of the market spectrum. At one end,
there is increased consumer demand for both
small, fuel efficient vehicles, which Toyota
and Honda make primarily in Japan. There
is also increased demand for luxury vehicles
such as Toyota’s Lexus and Nissan’s
Infinity, which are also made primarily
or exclusively in Japanese factories. Most
transplant factories make more middle-of-the-line
models.Is it possible after more than a
decade of Japanese OEMs building factories
in the U.S. to serve the market here that
they may be rethinking this strategy, at
least in part?Some believe so. The Associated
Press recently quoted an executive from
Nissan as saying they view things differently
now than they did a few years ago, when
the main operational goal was to build cars
locally. The goal was simplicity. Now, Nissan’s
Thierry Viadieu says multinational manufacturers
need to be more sophisticated in their production
strategies, coordinating production among
factories across the globe. Others say that
high end and new technology vehicles need
to be produced in Japan to perfect the advances
and maintain high quality levels.
The
combination of weaken U.S. OEMs in Detroit
and this “insourcing” back to
Japan will continue to put pressure on U.S.
auto workers and parts suppliers. |
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