Japan produces more cars abroad

12 companies boost output 10.6%


TOKYO -- Hitting a milestone, Japanese carmakers produced more vehicles abroad than at home for the first time last fiscal year, an industry group said yesterday.

The 12 car and truck makers in Japan, which include Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., built 10.93 million vehicles at their overseas factories in the year that ended March 31, according to a report by the Japan Automobile Manufacturers Association. That compares with 10.89 million vehicles they produced in Japan, the group said.

The milestone indicates that the longtime strategy of Japanese automakers to globalize production is paying off. More important, the trend will probably continue, and analysts say the pace may even be stepped up.

Analysts also said the figures reflected a recent scramble to increase production in China and grab a foothold in the world's fastest-growing major car market, as well as their strong sales in the United States, where Toyota, Honda and Nissan all have expanded production.

At the same time, local production helps Japanese carmakers shield their revenue and profits from currency swings and helps them tailor designs to local tastes.

As growth in China and elsewhere in Asia continues, Japanese carmakers are well positioned to move in, and their rapid expansion plans, which bring jobs and tax revenue to the localities, have made Japanese automakers welcome investors in many countries.

Japan's production expansion abroad also reflects how the industry has changed from the 1980s and early 1990s, when Japan's surging auto exports were a source of bitter trade disputes with economic partners such as the United States. The first Japanese car plant in the United States was Honda's factory in Marysville, Ohio, which opened in 1982.

Since then, Japanese production has expanded on every major continent.

According to 2005 figures, the most recent breakdown from the Japan Automobile Manufacturers Association has 4.08 million vehicles made in the United States, 3.96 million in Asia, 1.55 million in Europe, 645,000 in Latin America, 226,000 in Africa, 135,000 in Australia and 10,500 in the Middle East.

The figures released yesterday also gave a glimpse of the growing popularity abroad of Japanese cars, whose fuel efficiency has won over consumers as the price of gas has passed $3 a gallon in the United States and is even higher in other countries. The Japanese industry association said production at Japan's overseas plants jumped 10.6 percent from the previous year.

While Japanese companies have been building cars overseas for decades, it is only in the past few years that they have ended their reliance on cars and major car parts exported from Japan.

Analysts said the figures also reflected the robust global demand for fuel-efficient Japanese cars at a time when General Motors Corp. and Ford Motor Co. had seen big losses on their North American operations. As companies like Nissan and Honda earn a majority of their sales and profits from overseas markets like the United States, they have been building more cars abroad to be nearer their customers, analysts said.

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