Nissan Boosting Rogue Production in South Korea
When we have been discussing the probable upcoming exit of United Kingdom from the European Union, or Brexit, and how it affects Japanese carmaker Nissan, we have been mostly focusing on what could happen to its facility in Sunderland, UK. The impact of the Brexit vote was felt around the world, however, as markets lost confidence in the future they had previously seen, and several currencies rose in value, especially when compared to the falling British pound.
One currency to become stronger since the Brexit referendum is the Japanese yen, which has increased about 20% against the American dollar. This is putting pressure on Japanese exporters, because a stronger yen means that dollars coming in from the United States to buy their goods are worth less than they used to be. Exporters will have to raise their prices to continue to operate, which could slow exports down.
However, if you’re a big automaker like Nissan, with plants all around the world as part of the Renault-Nissan Alliance, you can just shift production around to a country with a slightly weaker currency. Renault has a factory in South Korea, where the won has risen only 7.4% against the dollar. According to company executives, Nissan has asked the plant to boost its production on Nissan Rogue crossover vehicles by 8,000.
The Nissan Rogue is one of Nissan’s bestselling vehicles in North America, so the shift in production is a move to help keep prices lower and keep sales at their current growth rate. As currency exchange rates start to settle down, we’ll see if production heads back to Japan.
News Source: Reuters