Rest of Asia exporting more Japanese cars

Japanese automakers are scrambling to increase exports from production bases in other Asian nations to take advantage of improved worker skills and trade deals.

Asia replaced North America as the largest overseas production base for Japanese automakers in 2006, with output reaching 4.13 million vehicles. Though these vehicles were intended to meet local demand, about 400,000 were shipped to other regions. The figure is expected to reach 600,000 in 2008, more than 10% of production.

In one example, Honda Motor Co. is boosting exports from Thailand to Australia and New Zealand by 40%, or 47,000 units.

Nissan Motor Co. this fiscal year is doubling exports of its Tiida subcompact from Thailand to Australia to roughly 10,000.

Last year, Toyota Motor Corp. exported 100,000 IMVs (Innovative International Multi-purpose Vehicles) to more than 90 countries from Thailand. It will step up exports this year and continue doing so in the future.

Suzuki Motor Corp. plans to triple output capacity to 300,000 vehicles a year at its second Indian assembly plant in 2008. Half will be shipped to Europe and the Middle East. Nissan will launch a new plant in India in 2009 and export subcompact cars to Europe from there.

At a joint venture for export models in the Chinese province of Guangdong, Honda doubled output of subcompacts to 50,000 a year this past spring. The cars are bound for 10 countries, including the U.K., Germany and France. Beginning this month, they will be shipped to Poland and the Czech Republic as well.

One reason for all these exports is the improved quality of Asian-made automobiles, thanks to technology transfers and parts suppliers setting up local operations.

Trade deals are another reason. Thailand signed a free-trade agreement with Australia in 2005, shedding a 15% tariff on passenger cars. More may be on the way. The Association of Southeast Asian Nations and India have agreed with the European Union to launch trade negotiations.

In fiscal 2006, Honda earned nearly 10% of its group operating profit in Asia and Suzuki generated about 40% of its group pretax profit in India alone.

Referenced from Nikkei Weekly