Rising yen could force production shifts - Toyota

TOKYO – Toyota’s president acknowledged that shifting production abroad may be inevitable to ward off damage from a rising yen, a reversal of course for the Japanese automaker.

Toyota Motor Corp. president Akio Toyoda made the comments in a New Year’s message posted Friday on the company’s website. He promised to outline in April his plan to revamp management and regain trust after the global massive recalls that battered Toyota’s once pristine image for quality.

Under the new strategy, it may also become necessary to move production to eke out profit amid currency rate fluctuations, he said, while noting that such decisions will be made carefully.

“But if profits cannot be achieved, then we have no choice but to realistically consider the option of shifting production,” Toyoda said.

Toyota, the world’s biggest automaker, has been more aggressive than Japanese rivals Nissan Motor Co. and Honda Motor Co. to keep production in Japan. It controls a bigger share of the domestic market and also exports more vehicles out of Japan.

The dollar’s plunge — it currently trades at about 83 yen — has chipped away at the value of the overseas earnings of Japanese exporters such as Toyota.

Toyota is still reeling from the sudden-acceleration recalls in late 2009 and last year that resulted in the manufacturer recalling more than 11 million vehicles worldwide to fix sticky acceleration pedals, faulty floor mats, software glitches and other problems.

Toyota was the only major automaker to sell fewer trucks and cars in the US last year compared to the previous year.

Toyoda, the grandson of the automaker’s founder, said his new strategy will include ways to reflect the needs of regions outside Japan to work as a global company.

“I have said repeatedly that Toyota in Japan should not be controlling the various regions,” he said. “Of course, Toyota is a multinational company, but we want to be the best company in town in each and every region.”

During the recall crisis, Toyota was criticized as being slow in responding, and Toyota officials have acknowledged that better communication among its global operations is crucial.

In December, Toyota agreed to pay $32.4 million in fines to the US government to settle the investigation into its handling of two recalls. The latest settlement was on top of the $16.4 million fine Toyota paid earlier.

Earlier this month, Toyota announced it was setting up a safety research center in Michigan. It is also trying to give its US offices a more direct role in safety related decisions.