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A.W.E.S.O.M. - O
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Bleak article today in the Automotive News (http://www.autonews.com/article/20120611/OEM01/306119947/1117) on just how corrosive the yen/dollar exchange rate has become for Japanese car companies.
Asked whether Honda makes any profit on Fits sent to the United States, CFO Fumihiko Ike said flatly, "No."
"Under the current exchange rate of 80 yen per dollar, our export business doesn't make any profit," Ike told Automotive News.
"We need to keep our customer base," Ike said. Exports of money-losers will continue "just for the sake of our dealers. At least they have something" to sell."
Ike added: "We need to keep the customer base and demographics, especially [with] hatchbacks for the younger generation. For them, it's a very good car."
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HONDA AFVM
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A.W.E.S.O.M. - O wrote:
Bleak article today in the Automotive News (http://www.autonews.com/article/20120611/OEM01/306119947/1117) on just how corrosive the yen/dollar exchange rate has become for Japanese car companies.
Asked whether Honda makes any profit on Fits sent to the United States, CFO Fumihiko Ike said flatly, "No."
"Under the current exchange rate of 80 yen per dollar, our export business doesn't make any profit," Ike told Automotive News.
"We need to keep our customer base," Ike said. Exports of money-losers will continue "just for the sake of our dealers. At least they have something" to sell."
Ike added: "We need to keep the customer base and demographics, especially [with] hatchbacks for the younger generation. For them, it's a very good car."
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That goes for the Insight and the CRZ too.............
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A77
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So how does Mazda survive at all - it sells hugely discounted Mazda 3s in Canada at prices sometimes as low as Fits. And they have 0% financing for 84 months. Unlike our 4.49 for 72 months on Made in China Fits.
Sure US ones are made in Japan, but I still call, in part, bollocks.
We sold a CRZ last week - I think we took $6000 off its list price, massive loss for the dealership. Rest are in used.
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IntegraDC5R
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If they are not losing money on them, then why would my Fit cost me over US$25k if I purchased it today. When I purchased it, it cost me over US$22k. The ¥/$ was 88/1 at the time of purchase and now is 77/1.
Yet Fits are selling for what $18k for a Sport, give or take. Turn that $18k into ¥ and it is just ¥1386000. You can not even get the 1.3L model for that low here in Japan. And of course all of that 18k doesn't go right back to Japan.
So yes, they are indeed losing money on any car produced in Japan and sold in North America.
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IntegraDC5R
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And to put into more perspective how horrid the US $uck is compared to the ¥, back in 2003 I ordered a brand new DC5R, it cost me just around $24.5k. The ¥ price was 2.9 million, my Fit was just 1.97 million. HUGE difference between these 2 vehicles, yet today the Fit actually costs more here or was just a couple thousand less when originally purchased.
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retired
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http://www.vtec.net/forums/one-message?message%5fid=1039345
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JeffX
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IntegraDC5R wrote:
If they are not losing money on them, then why would my Fit cost me over US$25k if I purchased it today. When I purchased it, it cost me over US$22k. The ¥/$ was 88/1 at the time of purchase and now is 77/1.
Yet Fits are selling for what $18k for a Sport, give or take. Turn that $18k into ¥ and it is just ¥1386000. You can not even get the 1.3L model for that low here in Japan. And of course all of that 18k doesn't go right back to Japan.
So yes, they are indeed losing money on any car produced in Japan and sold in North America.
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This is one reason why I think our TSX Wagon (or any TSX) is a freaking steal at the transaction prices we're seeing today. I don't know how much longer they can sustain sales at those prices.
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cforez
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A77 wrote:
So how does Mazda survive at all - it sells hugely discounted Mazda 3s in Canada at prices sometimes as low as Fits. And they have 0% financing for 84 months. Unlike our 4.49 for 72 months on Made in China Fits.
Sure US ones are made in Japan, but I still call, in part, bollocks.
We sold a CRZ last week - I think we took $6000 off its list price, massive loss for the dealership. Rest are in used.
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I guess Mazda is surviving. However, they haven't been profitable in the past four years and just diluted their shares by 70% to raise $1.8 billion and borrowed an additional 70 billion yen (~$872 million) in March. FY 2013 is going to be touch and go for them too.
0% for 84 months sadly sounds exactly what Mitsubishi was doing right before they imploded. Mazda probably isn't making any money on the 3 between the discounts and the 0%.
Mazda is also moving 6 production back to Japan from Michigan, but I guess you can't stick around if you're just moving around 2,500 units/month.
It's tough to be a Japanese car manufacturer nowadays...
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IntegraDC5R
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The auto industry is huge business in sales every year in the US. How about a little conspiracy theory tossed in, the ¥ and € are stronger than the $uck, so cars made in countries that use those currencies suffer unless they move production into the US (which has been done for several years/decades), this helps the US out with jobs, but still doesn't earn the companies much profit back home. Is this some sort of ploy by the US Government to try and force Americans into buying Mexican? :P
Not being serious, but it could be looked at, even if briefly.
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JP
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A.W.E.S.O.M. - O wrote:
Bleak article today in the Automotive News (http://www.autonews.com/article/20120611/OEM01/306119947/1117) on just how corrosive the yen/dollar exchange rate has become for Japanese car companies.
Asked whether Honda makes any profit on Fits sent to the United States, CFO Fumihiko Ike said flatly, "No."
"Under the current exchange rate of 80 yen per dollar, our export business doesn't make any profit," Ike told Automotive News.
"We need to keep our customer base," Ike said. Exports of money-losers will continue "just for the sake of our dealers. At least they have something" to sell."
Ike added: "We need to keep the customer base and demographics, especially [with] hatchbacks for the younger generation. For them, it's a very good car."
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So that means the FIT manufactured in Brasil or Indonesia is not reliable to import it into the USA?
why not to have the one made in China that is exported to Canada?
Are they frightened of the safety recalls?
BTW, the FIT sold in Mexico is either Indonesian or Brazilian...
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Grace141
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http://world.honda.com/news/2011/c110812New-Automobile-Plant-Mexico/index.html
My guess would be North American Hondas up to and including the Civic LX in price will be sourced from Mexico and China. I would also suspect that by 2016 we Americans will see no Japan-sourced Hondas or Acuras sold here.
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HONDA AFVM
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Jeff wrote:
IntegraDC5R wrote:
If they are not losing money on them, then why would my Fit cost me over US$25k if I purchased it today. When I purchased it, it cost me over US$22k. The ¥/$ was 88/1 at the time of purchase and now is 77/1.
Yet Fits are selling for what $18k for a Sport, give or take. Turn that $18k into ¥ and it is just ¥1386000. You can not even get the 1.3L model for that low here in Japan. And of course all of that 18k doesn't go right back to Japan.
So yes, they are indeed losing money on any car produced in Japan and sold in North America.
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This is one reason why I think our TSX Wagon (or any TSX) is a freaking steal at the transaction prices we're seeing today. I don't know how much longer they can sustain sales at those prices.
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I don't think that is the case with the TSX. It is a world car, as the Fit is, but the TSX engine is in how many other cars, 5? the base 2.4L engine is in the Crosstour, Accord, Civic Si, CRV and the Euro, Asian and US Accord/TSX.........5. Then you have many other parts across the board that the car shares.......The FIT, how many cars does it share parts with. CRZ and Insight and a few other limited production or poor selling vehicles.......Am I wrong?
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superchg2
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HONDA AFVM wrote:
Jeff wrote:
IntegraDC5R wrote:
If they are not losing money on them, then why would my Fit cost me over US$25k if I purchased it today. When I purchased it, it cost me over US$22k. The ¥/$ was 88/1 at the time of purchase and now is 77/1.
Yet Fits are selling for what $18k for a Sport, give or take. Turn that $18k into ¥ and it is just ¥1386000. You can not even get the 1.3L model for that low here in Japan. And of course all of that 18k doesn't go right back to Japan.
So yes, they are indeed losing money on any car produced in Japan and sold in North America.
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This is one reason why I think our TSX Wagon (or any TSX) is a freaking steal at the transaction prices we're seeing today. I don't know how much longer they can sustain sales at those prices.
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I don't think that is the case with the TSX. It is a world car, as the Fit is, but the TSX engine is in how many other cars, 5? the base 2.4L engine is in the Crosstour, Accord, Civic Si, CRV and the Euro, Asian and US Accord/TSX.........5. Then you have many other parts across the board that the car shares.......The FIT, how many cars does it share parts with. CRZ and Insight and a few other limited production or poor selling vehicles.......Am I wrong?
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Since the TSX is built in Japan I would imagine the unfavorable exchange rate makes it pricey to build, as well.
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A.W.E.S.O.M. - O
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It is sad to see basically an obituary for the "J" code Hondas. Here on the West Coast over the past 25 years most mainstream Hondas - Accords, CR-Vs, etc. - were Japanese. Many boasted their car was "made in Japan".
End of an era (and looks like the TSX from the implications). Better run out and snag one while you still can.
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TonyEX
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HONDA AFVM wrote:
I don't think that is the case with the TSX. It is a world car, as the Fit is, but the TSX engine is in how many other cars, 5? the base 2.4L engine is in the Crosstour, Accord, Civic Si, CRV and the Euro, Asian and US Accord/TSX.........5. Then you have many other parts across the board that the car shares.......The FIT, how many cars does it share parts with. CRZ and Insight and a few other limited production or poor selling vehicles.......Am I wrong?
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Fit/Jazz, Freed, City (Aria)... I think they make TONS of them.
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TonyEX
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IntegraDC5R wrote:
The auto industry is huge business in sales every year in the US. How about a little conspiracy theory tossed in, the ¥ and € are stronger than the $uck, so cars made in countries that use those currencies suffer unless they move production into the US (which has been done for several years/decades), this helps the US out with jobs, but still doesn't earn the companies much profit back home. Is this some sort of ploy by the US Government to try and force Americans into buying Mexican? :P
Not being serious, but it could be looked at, even if briefly.
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Awhile back, I asked my boss not to give me a raise.. but to pay me in Mexican pesos.
It was a joke... but it underscores the truth.
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MasterOfDaDomain
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Well, currency exchange rate is just... currency exchange rate. Lots of factors influence that, and Japan is not the only one having to deal with it - Germany, Switzerland, China all big exporters do, just with different methods.
Honda could have started Fit production in the U.S. long time ago, but it rather builds more SUVs, because they are more profitable. BMW makes the same decision.
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DrWhiner
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It's only natural. The U.S. is probably the largest market for BMW's X5. Same for Honda's SUV.
One big difference btn BMW and Honda is BMWalso exports tons of SUV to other markets, therefore, nicely hedging their curr. exposure.
Not to forget
- the cheapest BMW (RWD) is about double that of the Fit;
- the BMW not only sells for more but also has a higher margin, esp. for those loaded w/ options, the margin is much, much higher. That leaves more room to buffer the curr. or to engage in hedging.
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DrWhiner
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JP wrote:
So that means the FIT manufactured in Brasil or Indonesia is not reliable to import it into the USA?
why not to have the one made in China that is exported to Canada?
Are they frightened of the safety recalls?
BTW, the FIT sold in Mexico is either Indonesian or Brazilian...
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Nice to know there are Fit sourced from Indonesia in Mexico.
First , I would look into are there diff. in spec.?
what are the diff.? Why?
Where can I get those (missing) parts?
Are they available locally?
How expensive to import?
Is there spare production capacity?
Can local suppliers increase their production? What's the lag time?
How expensive to export to the U.S.?
just asking....
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DrWhiner
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JP wrote:
BTW, the FIT sold in Mexico is either Indonesian or Brazilian...
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Since when Mexico have Fit from Indonesia??
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gogzy
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Japanese car maker are suffering from the strong Yen, sorry, every manufacturer in Japan is suffering. Its currency has become a safe heaven, and it's interest is so low that it can only go up in future (if they ever move, i am sure some members here know there are no gain to park money in banks in Japan for a long while now). too bad there is no TSX wagon here in Canada, i thought the strong CDN may offset some loss from currency exchange for Honda.
and BMW, oh the Germans, the dear super marketing teams... EU is in a completely different system - weak EU nations in the basket, mostly, weaken the currency somewhat. the EURO would be so strong without them, that it over shadow the German export. my guess this is the reason German is the most eager (or the only one trying) to keep ALL (well, most of them weak) of them onboard, it need every of them to offset it's gain, to mask it's export surplus. think about it, it's all about math. Germans export can not survive without these...what they call lazy slackers....
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HondaFan1990
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MasterOfDaDomain wrote:
Well, currency exchange rate is just... currency exchange rate. Lots of factors influence that, and Japan is not the only one having to deal with it - Germany, Switzerland, China all big exporters do, just with different methods.
Honda could have started Fit production in the U.S. long time ago, but it rather builds more SUVs, because they are more profitable. BMW makes the same decision.
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Well let's not say more profitable as if it's a bad thing. Honda is a company. They're going to do what's best business-wise and financially. Honda sales a ton more CRVs, Pilots, and Odysseys in the US than the Fit. No brainer they'd go for what brings in the bacon and eggs, not just toast and jelly.
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