Nissan Motor Co on Tuesday warned that Japan's auto industry faces a crisis beyond near-term losses as the yen hit a fresh 15-year high and came within reach of a record peak against the dollar.
"We're way past the point of talking about how the yen's rapid appreciation would damage our earnings, or that we're worried about it," chief operating officer Toshiyuki Shiga said at the launch of the company's new hybrid car. "I feel a huge sense of crisis over the strong yen."
Nissan, like other Japanese auto makers, has assumed an average dollar rate of 90 yen for the business year to March 31, 2011 — a level Shiga said was still too strong for the car industry.
But the greenback fell to a fresh 15-year low of 80.41 yen overnight — within reach of a 79.75 record low.
Shiga, also head of Japan's auto lobby, said Nissan is taking various steps to offset near-term currency losses such as building cars exported from Japan at production sites abroad wherever possible.
The strong yen's longer-term implications are dire for Japan's world-leading manufacturing industry, however, and could weaken the competitiveness of auto makers and suppliers if they are forced to move out of Japan, he said.
Shiga said Nissan wanted to continue building lower-margin compact cars in Japan on top of value-added products such as hybrids and luxury models.