Japan's Car Production Surpasses Pre-Quake Level

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Nissan cars are loaded onto a cargo ship Japan.

TOKYO-Japan's auto production rose in August from a year earlier, eclipsing the pre-quake level of a year earlier for the first time since the March disasters, as car makers closed in on a complete restoration of their once-crippled parts supply chains.
Auto production grew from the previous year for the first time in 11 months in August, while vehicle exports for the month posted the first on-year increase in six months.
While rising production shows the progress car makers have made in restoring their operations, it will offer little help for their bottom lines, as the strong yen squeezes the profitability of shipping vehicles from Japan.
Another motive for pessimism, despite the healthier figures, is the likelihood of exports faltering as the debt crisis in Europe and economic uncertainties in the U.S. cloud the outlook for overseas demand.
Production of cars, trucks and buses in Japan increased 1.8% from the previous year to 704,096 in August, while vehicle exports jumped 7.6% to 363,772 vehicles, the Japan Automobile Manufacturers Association said Friday.
The upbeat return to above a pre-disaster level bodes well for Toyota Motor Corp. and other Japanese car makers that are ramping up output to make up for delayed production.
Still, only a few manufacturers are looking to boost exports from Japan, as most auto makers are seeking to raise production overseas to mitigate the impact of the strong yen, which remains near a postwar record high of ¥75.94 against the dollar.
Last month, Honda Motor Co. decided to build a new plant in Mexico to produce compact cars, which tend to have narrower margins, making them less profitable to export from Japan. Nissan Motor Co. also plans to move the production of its Rogue small sport utility vehicle to a plant in Canton, Mississippi, from a factory in Kyushu, Japan.
Despite the increasing reliance on manufacturing abroad, Japanese auto makers have pledged to maintain production in Japan, with many of them arguing that the manufacturing technologies and skills developed at their domestic factories help make their vehicles competitive.



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