Japan's auto lobby called on government officials on Friday to take action against the rising value of the yen. The high value of the yen is forcing Japan's automakers to rethink their production strategies, including moving some manufacturing operations overseas.
Just five years ago Japan's exchange rate stood at 120 yen per dollar, but that ratio has shrunken to just 78 yen per dollar today, making it more expensive to export goods from the country. As a result, automakers are facing thinner margins and are considering alternative production locations.
"The current foreign exchange level, which is far from the actual ability of the Japanese economy, goes much beyond the limits of what companies can do through efforts to cut costs," Akio Toyoda, head of the Japan Automobile Manufacturers Association and president of Toyota, said in a statement.
He continued: "Japan's manufacturing is facing a great crisis again, and if things remain this way it could have a further impact on employment."
Toyota has already moved some vehicle production out of the country -- including shifting manufacturing of the Yaris compact to France and the Lexus RX to Canada – and more production shifts could be forthcoming.
"Facing the rise of the yen, we are considering various ways to cut costs. As a part of making the business profitable again, our options include price hikes such as for cars we export from Japan," Joichi Tachikawa, a spokesman at Toyota, told Reuters.