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The theories that brought us here today will no longer serve us well going forward.

11 Comments

Toyota Motor Corp President Akio Toyoda, delivering a chilling warning to Japan Inc that the days of easy yen-fuelled profits are over. (Bloomberg)

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Oh the paradox of a Toyota boss saying in effect that the longstanding corporate welfare, measures to keep down the yen and be damned to everyone else, and social policies to produce compliant workers will no longer work! Perhaps he is slowly learning that he is part of the problem, not the solution. Or perhaps he just has something less in mind.

4 ( +5 / -1 )

The theories that brought us here today will no longer serve us well going forward.

In isolation, this could be anything. A link to the fuller context would be welcome.

If he means that over-reliance on an internal ecosphere - be it corporate or national - is unhealthy, then spot-on.

If it's the old orthodoxy that scale means everything, then spot-on.

If it's that the threat to the automotive status quo come out of a non-G7, non-BRIC country, then spot-on, too.

0 ( +0 / -0 )

Toyota has long ago adapted to the strong yen by building favorites in America or elsewhere. When the exchange rate is poor, they keep their money in America or Europe, and invest it there. When the rate is good, they bring it to Japan, though it is painful, as they lose one-third of it as soon as the taxman comes.

As for Toyota Japan, domestic sales have declined for years, and Toyota has lost money here for the past several years running. In fact, no Japanese automaker earns a profit in the world's third largest economy. But those of us who have cars in Japan, especially the cities, know that owning a car is stupidly expensive, mostly due to bi-annual inspections, road taxes, tolls, gas taxes, parking, etc etc.

2 ( +3 / -1 )

Japan is smart to massage its currency.

No, it is not, because being able to manipulate the currency and domestic economy removed the pressure for Japan and it's companies to earn money though competition and innovation. Now these same companies are losing their markets to foreign competitors. And let's not forget than in a country where the majority of food and other staples are imported, "massaging" the yen to keep the big companies profitable comes at the cost of all of use who have to pay more for almost everything we eat, and most other things we buy.

4 ( +5 / -1 )

Are you going to take the comment at face value? Or are you going to assume he is talking about Toyota?

Because when he says US, he is certainly not talking about Toyota. Toyota was selling a ton of cars with the yen at 360 to the dollar, at 150 to the dollar, at 120 to the dollar, and at 75 to the dollar. Anyone who thinks Toyota sells cars because of the yen has a hole in their head. And anyone who thinks that Toyota needs to manipulate anything to make a profit has two holes in their head. And they aren't nostrils. In fact, Toyota's greatest profits in its entire history have come with a much stronger yen, not the opposite.

OK. So he was not talking about Toyota? Then whom is he talking about? Companies making bank on the low yen. Hmm. I guess that would be a company with no brand recognition abroad, low quality, using cheap Japanese labor. To which I have to say that any such company has been uncompetitive for a long time.

-1 ( +0 / -1 )

This just came out today:

http://www.imd.org/uupload/imd.website/wcc/scoreboard.pdf?MRK_CMPG_SOURCE=wcc-1516004

Japan currently ranks at #26 in the global competitiveness rankings, among the lowest in the developed world. This is based on over 340 factors, including government & corporate efficiency.

Japan is a nation in decline by all accounts.

3 ( +3 / -0 )

A link to the fuller context would be welcome.

@SenseNotSoCommon

Here is the fuller context (article plus video segment of press conference with Akio Toyoda): http://www.bloomberg.com/news/articles/2016-05-11/japan-inc-braces-for-loss-of-cheap-yen-as-true-toyota-exposed

2 ( +2 / -0 )

Toyota may be able to make a profit at 10 yen to the dollar but they will make more at 110. When the yen was under 90 to the dollar a few years back the first stop on regular reports was the offices of Toyota for news on how it would affect them. Much bellyaching occurred. Before long there were was corporate welfare concealed under greenwash subsidy schemes. Meanwhile, a passive media largely ignored the trials and tribulations of the company in the US. What Toyota wants it usually gets. If Japan had been designed from top to bottom, cradle to grave by Toyota it would probably not look much different to how it is now.

1 ( +1 / -0 )

A two line comment isn't t sufficient to comment on.....

0 ( +0 / -0 )

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