Dow Jones Newswires (Tokyo) - The chairman of the Japan Automobile Manufacturers Association said Monday the yen's current level is "not acceptable," warning that any loss of competitiveness overseas due to the stubbornly strong currency could result in job losses in the industry.
"The current strong yen is not acceptable at all," Toshiyuki Shiga, who is also Nissan Motor Co.'s (7201.TO) chief operating officer, said at a press conference.
"It is impossible to make profits at around Y80," against the dollar by exporting vehicles from Japan, he said.
About half of the 8.6 million vehicles built in Japan last year were shipped overseas, Shiga said.
The comments are the latest warning from an industry that is struggling under the twin pressures of a strong domestic currency and production disruptions after the March 11 earthquake and tsunami.
On June 8 the JAMA and the Confederation of Japan Automobile Workers' Unions issued a joint statement urging the government to take steps to deal with the yen's strength after the dollar hit a monthly low of Y79.69 on the same day.
"The Japanese automobile industry has carried out a steady stream of cost-cutting and other measures necessary to maintain its international competitiveness. The yen's present exchange rate level, however, clearly exceeds the limits of such efforts," the statement said.
As of around 0625 GMT on Monday, the dollar was at Y80.14.
As domestic production lines begin to return to normal after the March 11 earthquake and tsunami, Shiga said some Japanese car makers may not fully comply with an industry-wide drive to save electricity by shuttering factories on Thursdays and Fridays from July to September, as they want to make up for lost output caused by supply-chain disruptions.
JAMA had pushed its members to operate on Saturdays and Sundays during the summer months, when overall power consumption is lower--a move aimed at mitigating the risk of electricity blackouts amid expected power shortages.
Shiga said some car makers may operate part of their production lines on Thursdays and Fridays, as well as over the weekend, but he added that overall power consumption is still expected to be lower.
"It is not a bad thing, as the plants will be operating on a smaller scale," he said.
As more companies look likely to bring their production back to normal earlier than expected, domestic sales will likely pick up, Shiga said.
Toyota Motor Corp. (7203.TO) president Akin Toyota said last Friday that the company's domestic and overseas plants will return to full output from July, well ahead of the company's initial November or December target.
Honda Motor Co. (7267.TO), Mitsubishi Motors Corp. (7211.TO) and Mazda Motor Corp. (7261.TO) have also said that their manufacturing operations are returning to normal earlier than expected, thanks to a faster-than-expected recovery in parts production at suppliers damaged by the disaster.
