2012 Honda Fit (Photo : Honda)
Japanese auto giant Honda has decided to limit exportation to the U.S. due to loss of money.
According to the Automotive News, an online portal, said this is the first admission by a Japanese car company that it's losing money on exports to the U.S. The issue is the dollar's weakness against the yen, which cuts the value of a U.S. sale.
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"Under the current exchange rate of 80 yen per dollar, our export business doesn't make any profit," Honda CFO, Fuymihiko IkeIke, said in an exclusive interview with the Automotive News. "Definitely, the absolute number of exports to the United States will be decreasing."
Issue of foreign exchange, which made some of the largest world class automakers such as Honda, to aggressively expand their production plants in the U.S. in the very recent years. The expansion in U.S. also included from design studios to proving grounds. Honda has already produced more than 90 percent of the vehicles it sells in the North American region. And going by the official sources, Honda is all set to add another production plant in Mexico and will also expand production plants in other regions of U.S.
"The presence of Honda in U.S. has been made possible through low supplying models such as Fit subcompact, Insight hybrid, CR-Z hybrid, Civic hybrid and Acura TSX," said David Reuter, spokesperson for Nissan Motors. "Further information available to us reveal that even the Nissan Motors too is also thinking of cutting their exports to U.S. We're focused on localizing, producing here 85 percent of vehicles sold here by the end of next year, up from 70 percent."