NASHVILLE -- Nissan Motor Co. will immediately move some vehicle production from Japan to Mexico to cushion the blow of a strong yen, the company says.
The vehicles -- most likely the small Tiida -- would be made in Mexico and exported to markets around the world, according to Nissan North America, which oversees Mexican operations.
The Tiida is currently manufactured in both Mexico and Japan, where the steep appreciation of the yen has deflated this year's earnings for both Nissan and Toyota Motor Corp.
Nissan CEO Carlos Ghosn announced on Feb. 9 that the company will report losses of about $2.9 billion for the fiscal year ending March 31, 2009. He vowed to undertake global cost-cutting moves that included the elimination of 20,000 personnel. About 12,000 of them are occurring in Japan.
The yen's trading value is a major concern to the Japanese industry.
Jogi Tagawa, Nissan's corporate vice president and global treasurer, told analysts this month that every one-yen change in the yen-dollar exchange rate has an $85.7 million impact on Nissan's operating profit. In the past six months, the dollar has dropped by 15 yen -- an operating profit blow of nearly $1.3 billion, according to Tagawa's formula.
Fred Standish, spokesman for Nissan North America in Franklin, Tenn., declined to specify which Japanese model or models would be moved to production at Nissan's two Mexico assembly plants. He said the production volume that could be involved is also unclear because it will depend on sales demand in the car's individual export markets.
Standish said he has no knowledge whether the move might involve the addition of an entirely new model to Nissan's Mexican production roster.
The Tiida is sold in the United States as the Versa. All U.S.-sold Versas already come exclusively from Mexico. But versions of the same Mexico-built car are exported as the Tiida to the Middle East, western Europe, eastern Europe, Russia and other markets.