(Bloomberg) TOKYO -- Toyota Motor Corp. may reluctantly move more production outside Japan if it can't make profit because of the strength of the yen.
Relocating factories "is not something I want to do,'' President Akio Toyoda said in a statement on the company's website today. “If we are simply unable to make a profit, however, we may be forced to move our production elsewhere.”
Toyota, which makes more vehicles domestically than rivals Honda Motor Co., Nissan Motor Co. and Suzuki Motor Corp. combined, has said it wants to keep production of about 3 million vehicles a year in Japan. The nation's largest manufacturer expects to earn less in operating profit this fiscal year than Honda and Nissan, whose higher ratio of overseas production offers insulation against currency swings.
Toyota will announce its “2020 vision” in April including a medium-term business reform plan, Toyoda said today.
The automaker is moving slowly in response to the yen's rise compared with rivals and changes in the industry, said Yuuki Sakurai, chief executive officer and president at Fukoku Capital Management Inc. in Tokyo.
“While we can understand Toyota's point of view, investors are not happy about this,” Fukoku's Sakurai said.
Global automakers are increasing manufacturing outside their home countries to reduce costs.
Nissan moved Japan production of its March compact to Thailand in July, citing the yen's rise, and this week said it will start making its Rogue sport-utility vehicle in the U.S. Fiat SpA Chief Executive Officer Sergio Marchionne has threatened to shift production outside Italy if workers don't agree to working longer hours and reduced rights to strike.
The strength of the Japanese currency trimmed Toyota's operating profit by 120 billion yen ($1.45 billion) in the six months through September, compared with an impact of 49 billion yen at Honda and 55 billion yen at Nissan, according to the companies.
The yen traded at 82.6 yen as of 3:33 p.m. today after reaching 80.22 against the dollar on Nov. 1, a 15-year high.
Nissan, Japan's third-largest automaker after Toyota and Honda, expects domestic production this fiscal year ending in March to be 28 percent of worldwide production, while Honda made 27 percent of its autos at Japanese plants last year. Tokyo-based Honda hasn't disclosed its plan for the current year.
Toyota's Japan production will be about 40 percent of its global output, based on figures the automaker released on Dec. 21.
“I have a sense of duty in not letting manufacturing disappear from Japan,” Toyoda told reporters in Yokohama on Dec. 22. “Toyota is a global company, but we are also a representative of Team Japan.”