Yes, Virginia, exchange rates do matter (JPY edition)
The yen depreciates. Against the dollar, bien sur. But especially against the euro and other European currencies. Guess what happens?
Japanese exports to Europe rose by nearly 18% (y/y) in May.
No doubt some will argue that the ongoing rise in Japan's trade surplus (at a time when oil is expensive and the US economy has slowed) has no more to do with the weakness of the yen than the ongoing rise in China's trade surplus has to do with the RMB's weakness.
I don't buy it. A forthcoming Marquez/ Schindler study (hat tip, Menzie Chinn) suggests that a 10% appreciation in the RMB (in real terms) would reduce China's trade surplus by between $65-70b (around 2% of China's GDP).
And yesterday's Wall Street Journal illustrated just the yen/ dollar influences trade flows.
Toyota sells a lot of cars in the US. It has to decide whether or not to make those cars in the US, in Japan or somewhere else. Over the past few years, the ratio between Toyota's US sales and its US production has fallen, as Toyota's US production hasn't increased as rapidly as its US sales.
Toyota has plants in the US as a hedge against yen strength — to be sure. But also as a hedge against a return of the Japan-bashing of the 1980s. The more plants Toyota has in the US, the more votes Toyota has in Congress. But at some point, the financial cost of "political" hedging gets to be too high. Toyota seems to have reached that point.
So long as Toyota makes a lot more money building cars in Japan and shipping them to the US than it makes building cars in the US, it has a strong financial incentive to invest in more Japanese capacity — not more American capacity. Norihiko Shirouzu in yesterday's Wall Street Journal:
Top Toyota executives are concerned that the car maker may have built too many U.S. factories, in part to build political support by providing new jobs in lots of places. And although Toyota's U.S. sales continue to grow, these executives worry about an uncertain outlook.
At the same time, a cheap yen is making it advantageous for Toyota to increase manufacturing capacity and export cars from Japan. "It's much, much more profitable to produce cars in Japan and ship them all to the U.S. right now, if it wasn't for the political problems that might cause," says a senior executive and management-board member. Toyota has increased shipments to the U.S. of Japanese-made vehicles from 762,000 in 2004 to 1.27 million last year. (Emphasis added)
Guess what. That is what it seems to be doing. Yuka Hayashi in the Journal earlier this month:
Toyota Motor Corp. and Honda Motor Co. both sell more cars in the U.S. than in Japan, but Toyota has invested three times as much in Japan as in North America over the past three years. Honda is building its first auto factory in Japan in nearly three decades.
Decisions about where manufacturing capacity to supply the US (and for that matter global) markets is located now will shape trade outcomes for the years to come. Remember, a big reason why the trade deficit fell in the 1980s was that Japanese — and to a lesser extent German — automobile manufactures started shifting production to the US. Right now, the opposite is happening. Japanese producers of hybrids simply aren't rushing to build US plants.
That matters. Japanese exports to the US haven't been growing fast recently (they are actually down in volume terms, according to Bloomberg), thanks to the sluggish US economy. But if the US recovers and Japanese firms opt to supply the US market from Japan, watch out.
UPDATE: Movie Guy notes in the comments that Toyota's US production is growing. Moreover, Toyota has already announced a series of additional investment, so its US capacity can reasonably be expected to continue to increase. Some of that new capacity may cut into the number of cars Toyota makes in Japan for the US market — remember, Toyota's exports to the US have increased over the past few years, as the growth in its US production hasn't kept pace with the growth in its US shares. And while Toyota no doubt will continue with its existing investment plans, the Wall Street Journal's reporting suggests that Toyota is starting to reevaluate how much more to invest in the US, given the cost advantage (see the quote above) now associated with producing in Japan.
Well, you have me convinced Brad. The thing with Japan seems to be just how we are going to cope with what is inevitable going to be a low interest rate environment for some time (can they ‘ever’ normalize?). As such, I just don’t see how the BOJ can make the low yen go away by raising rates to any meaningful degree. Sure, it might go to 0.75% or even 1% but the differential will persist I think and with the carry trade my guess that the ‘ultra’ low yen is here to stay.
As for the RMB, now that is another story but even if something happended on that front I am unsure as to how fast the growth path in China would shift, if at all!
I guess this relates to the very interesting discussion cited in your previous entry about the potential unravelling of Bretton Woods II. In terms of it ending with a big bang I don’t see it since it would require this infamous dollar crash which at this point is not possible I think since in the short term there is just not enough places all that liquidity can go. In short; who is going to run the deficits?
This, I admit, is based on my rather pessimistic view on China and the Petroexporters’ ability to suck up all the lion’s share of all the liquidity, at least in the light of a suddden correction.
Perhaps a new plaza between China, the Petroexporters, and Brazil? But then again, this is hardly a new topic.
A major reason that the China PBoC invested surplus US dollars into Treasury bonds was it feared, probably correctly, that this tremendous wave of cash hitting the underdeveloped markets for domestically traded goods would cause a dramatic spike in Chinese inflation. It also feared that the surplus money would be siphoned by corruption, especially in the interior provinces.
The Chinese yuan has been depegged from the US dollar with the major components of the currency basket consisting of Japan yen and Euros. The Japan yen falling in value due to US Hedge Fund carry trade activity has counterbalanced the rise in the Euro, resulting in the basically unchanged valuation for the Chinese yuan currency.
In this case, might the real competition be aimed at taking market share away from China:
“…Japan is now engaged in a soft-power rivalry with China that will only intensify in the years ahead…” http://www.ft.com/cms/s/1e493c70-1f94-11dc-ac86-000b5df10621.html
Claus - I’m interested in your comment about Rupee’s potential as a global reserve currency, rather than Yen, if you may be persuaded to expand on that thought here.
“Morgan Stanley uses only four models to estimate the yuan’s fair value, of which the median valuation suggests it is only 1% undervalued against the dollar—not the answer Congress wants. Another surprise is that most other emerging Asian currencies now look overvalued.” http://www.economist.com/finance/displaystory.cfm?story_id=9366051
@ Guest …
This is of course a very interesting question. What I do think is unlikely though is that the Euro could take up the baton for the Dollar. I mean this would, in the long term, be unmanagble for e.g. Italy and Germany and from the point of view of global imbalances it is clear that the Eurozone is not capable to run a US like external deficit. So for the time being the Dollar, for better or worse is stuck with it I think which again is also why I can’t see a sudden and violent unwind of the imbalances.
Which brings us to the EMs (i.e long term alternatives to the dollar) … Clearly, I would say that what the Rupee has going for it is that India is just about the only big EM actually ‘behaving’ like a EM even if India still retains capital inflow restrictions in key sectors. So, on that account there is a fair reason to bet on the Rupee. Also in terms of demographics does India has the upper hands it seems comparatively to China where ageing is coming much sooner on the back of the one-child policy. However, what really determines who gets to be the ‘reserve currency’? I mean, clearly the depth and nature of capital markets matter too and here it is difficult to make a call I think on the EMs.
I will say, though, that if the status of ‘reserve currency’ demands that the country runs a persisting and large current account deficit I have some difficulty seeing how China will ever be able to do this.
A country can run persistent deficit if it can internally generate more wealth than its populace demands. So it trades away “wealth” for current consumption. To be an investor immigrant one needs about $1m — so let’s say that values the right be live in the U.S. at about $1m. Monetize that over 1m immigrants a year is about 1T. Yeah U.S. is about the only country that can run persistent deficit for a long time to come. Australia/Canada are not quite big enough (population wise).
The faster Chinese exports grow and the bigger China’s surplus gets, the more the economist argues that the yuan isn’t misaligned (usually citing jen, and if not jen, others). if the yuan isn’t undervalued now, it must have been hugely overvalued back in 01/02 — when it was stronger in real terms and China’s economy wasn’t as productive as it is now.
on a more technical note, i don’t like the use of behavorial equilibrium exchange rates for heavily managed currencies. basically, as i understand it, you are looking for the observed norm, and the norm is one that in china’s case is rather heavily determined by intervention, not by the market.
incidentally, as part of the IMF’s new exchange rate surveillance, it should be publishing an estimate for China’s RER. if any one wants to bet that it will show that China currently isn’t undervalued, I am happy to take the bet (full disclosure: I know a couple members of the team that produced the model … ). China is opposed to IMF exchange surveillance for a reason — they also know what the likely result of the model will be.
claus asked: “in short, who is going to run the deficits”
my answer, if the surplus countries start running smaller surpluses, the size of the deficits in the deficit countries would be able to shrink … the oil exporters are now doing their part (with a bit of a spending spree), but China and Japan are not …
Interesting points, but I do have couple of questions:
1. Weak JPY not withstanding, Japanese auto investments in China have soared tremendously. Here on the ground, I am surprised by the number of Japanese makes and models. Clearly, they’re after American and German automakers here, but I suspect there is far more at play here than exchange rates.
2. Weak JPY would also present an opportunity for American firms, whether autos or semi-conductors to invest in Japan. Yet I see no evidence of that. If it’s purely exchange rates, won’t that be happening more often?
Finally, with regard to Chinese exchange rates, anectodal evidence suggests export contracts are already pricing a 20% appreciation of Yuan. Whether this eventually eats into China’s trade surplus should be something to watch.
Hi Brad
“the oil exporters are now doing their part (with a bit of a spending spree), but China and Japan are not …”
Well look. Let’s break this down into three shall we: the oil exporters, China, and the elderly economies (for present purposes these would be those with a median population age of over 41).
Now on the first two of these groups I have very little to say, since I don’t know enough to comment usefully, but Claus and I have been focusing a lot on the latter.
Now outside Italy, I think it is true to say that EVERY country with a median age over 41 (Japan, Germany, Austria, Sweden, Finland, Switzerland) is running a surplus. Among G23 countries with a median age of between 35 and 40, almost all (again please correct me, we haven’t really got into generalizing this sufficiently yet) are running a deficit: Australia, New Zealand, the UK, Ireland, Greece, Spain, the US etc. This is what Claus is getting at when he says:
“in short, who is going to run the deficits”
Following the Modigliani idea of life cycle borrowing and saving patterns as applied to population median ages, we can see that this age group (median age 35-40) is destined - at least during the time horizon under which the ongoing demographic transition operates (the end-state here is anyone’s guess)- to bear the burden of facilitating the surpluses of the ever growing number of elderly societies which can only maintain their fiscal responsibilities (and hence control the “other” deficit, the fiscal one) by export driven growth.
(put a little more catchily, Japanese “underheating” in domestic consumption is being exported - via the flow of funds - in the form of “overheating” in domestic consumption in Brazil, India, New Zealand etc, and it is important to note that they have a continuing structural need to keep perpetuating this. You could call this “pass the parcel”).
Maybe you like or don’t like this, but it does seem to be a reality, and it is hard to escape from reality completely. OTOH, there would seem to be no justification whatever for the US running a fiscal deficit at this point. This one could be addressed.
The Italian case, of course, is especially important, since it has not responded to the challenge of becoming an export-driven surplus-generating economy in the way that ALL the rest have. As a result it has pressing short term structural problems, in particular how to generate sufficient GDP growth to stop the fiscal debt spiraling out of control.
I think part of the reason people are missing the bigger picture here is the whole obsession of presenting European data in aggregates. Philip Lane and Gian Maria Milesi-Ferretti (old “friends” of yours I think) typify this in their recent “Should Europe care about global imbalances?” article. They say the following:
“Europe is not a primary contributor to global imbalances; taken in the aggregate, it has a close-to-zero current account balance, even if there is considerable heterogeneity across individual European countries. Some run big deficits (Spain, Hungary, Portugal) while others run considerable surpluses (Germany, Sweden, Switzerland).”
Putting things like this means you completely lose sight of the key role that Germany (Germany is now completely structurally dependent on exports for GDP growth, see my two recent GEM posts which run through this in detail) is playing, both internally in the eurozone, and vis-a-vis the East European economies. The German need for exports is indirectly (this is the mechanism Claus and I are going to try and spell out) fuelling the deficits in Eastern Europe.
I think the importance of all this should NOT escape people’s notice as much as it has been. The BIS recently noted that one third of all new emerging market credit was going to the Eastern Europe countries. Germany is very locked-in to this. To give you an idea, despite all the talk about China as an export market, Germany exports more or less the same export value to the Czech Republic (and the population differences are obvious) as it does to China.
Of course the whole of Eastern Europe is now hitting capacity limits very rapidly (eg Q1 2007 Latvia wages up by 33% over Q1 2006), since they basically have very large labour supply problems given the collapse in fertility in 1990 and the heavy outflow of migrants to Western Europe. All of this now needs very careful watching.
Incidentally, in case you are interested I have a piece on Bonobo Land this week on the Swiss Franc carry trade which I think is relevant, since so much attention is focusing on the Japanese one.
I might try to break it into nuclear/military powers; finance, design, IT/software and brand centers (which seem to go together with military powers); resource powers (including water, uranium and agriculture) and manufacturing hubs.
Speaking of military powers: “…US Air Force Major Michael Tomasulo of the Andersen Air Force Base in Guam says Japanese and American pilots have been testing their aerial combat skills in an operation dubbed “Cope North”…” http://www.radioaustralia.net.au/news/stories/s1958638.htm
The demographic information is really interesting, but in tremendous flux? In addition to the one child policy, if China’s poverty, food and drug safety and pollution problems are as bad as the media makes them out to be, that might further limit their elderly population problem.
And I look at this: ‘London’s wealthy leave well-off behind’ http://www.ft.com/cms/s/5d196348-2035-11dc-9eb1-000b5df10621.html and wonder how many of those privileged few are in fact Russian or East Indian…? The Canadian Business Rich 100 list now includes dual (multiple?) citizens who don’t live in Canada… Shouldn’t that matter given the considerable wealth and power these people wield and the relative lack of consumer power enjoyed a large share of the world’s masses.
Along with the ‘core’ Asia block, concerns about the stability of the eurozone and whether GBP will ever consent to life as EUR - or whether some of it’s newer entrants will adopt the EUR, it’s really interesting to think about how alignments at the not so insignificant ‘fringes’ will evolve - Swiss, along with India, Russia, Israel, the GCCs, Latin America, AUD and NZD, Africa… considering the presumably massive differences/changes in the structure and ‘fundamentals’ of each.
It seems to me that the China/Yuan enthusiasts are also taking a narrow look at the ’successful’ aspects of China’s economy while ‘ignoring’ - perhaps not the right word as we don’t know how many journalists, lawyers, accountants and other gatekeepers may be among the thousands executed annually - other fundamental, very big and seemingly growing problems. Politically - the China power model, which seems to be characterized by secrecy, excess, exorbitant privilege of a few on the backs of oppression and deprivation for the majority - along with attendant management and accounting issues and lack of international diplomacy - doesn’t look sustainable to me. At least, I hope it isn’t.
Guest posting at 06:12:50:
Have you been to China? If not, I suggest you come (as I did) and find out. As the Chinese say, “seek truth from facts” and the best way to seek truth is to be on the ground, listening and observing.
Re: Edward Hugh
“Some run big deficits (Spain, Hungary, Portugal)”
“The German need for exports is indirectly fuelling the deficits in Eastern Europe.”
Let’s see an example: Hungary has sufficit with Germany (and with the whole EU) in goods trade, and has huge deficits with China and Russia. How is this explained by Germany’s need to export? My feeling was that Europe is going rapidly into a current account deficit (if not already in there) mostly because of a solidly rising deficit with China, coming from a cheap yuan vs.the euro.
China is opposed to IMF exchange surveillance for a reason — they also know what the likely result of the model will be. - Brad
Reply:
In the entire developing world, the Washington based IMF has no credibility whatsoever. It is an open secret that the IMF is basically a mouthpiece for the political agenda of the US Treasury Department. Under the Clinton-Rubin administration, the IMF raped and pillaged the economies of Southeast Asia and South Korea for the narrow economic interests of certain politically connected Wall Street Hedge Funds (ie. Soros Quantum Fund, Long Term Capital, Robertson’s Tiger Fund, etc.). Of course, China is opposed to the politically biased IMF exchange surveillance for a legitimate reason.
Core (or old in your terminology) europe exports capital to young europe on the periphery (tho i suspects parts of eastern europe with large deficits are not-so-young). aging and demographics may help explain this, as does the institutional context of the european union.
old japan is exporting capital not to young asia, but to the US, Australia, NZ, the Uk. sure some japanese capital flows to the rest of asia, but not all that much and what does flow is used to build up reserves and onlent to the us rather than used to finance a CAD.
And the older US doesn’t finance the younger nations of latam –
so i don’t quite think a demographics only explanation can work. nor can a demographics driven explanation easily explain why the yen has depreciated so much against the euro — that is an old v almost as old flow …
then perhaps LC can tell us how many journalists, lawyers, accountants and other ‘truth (and justice) seekers’ may be among the thousands executed annually.
As China is a pretty big place with massive class and regional disparities, it would be be most helpful if you could very generally, indicate your own proximity ‘to the ground’.
I live in a place that has a large and growing population of Chinese immigrants who (are able to) choose not to live, or raise their families in China, and organized mass demonstrations protesting Hu’s visit here.
My purpose was not to digress from the central theme of the post - only to question assumptions about ‘China’s’ strength and stability, along with the Eurozone’s.
Neither the Chinese government, or anyone claiming to represent it, have the right, capacity or credibility to speak on behalf of other Chinese, let alone any other people or nations.
> then perhaps LC can tell us how many journalists,
> lawyers, accountants and other ‘truth (and justice)
> seekers’ may be among the thousands executed
> annually.
I don’t think very many. The system isn’t the most open in the world, but I don’t think it is very likely that you’d have mass executions of lawyers and accountants without lots of screening. As with most societies the people that get stomped on are the poor and unconnected. Anyone who is a lawyer or accountant has enough connections not to get into too much trouble without lots of people hearing about it. It’s the poor peasant that gets stomped on.
> I live in a place that has a large and growing
> population of Chinese immigrants who (are able to)
> choose not to live, or raise their families in
> China, and organized mass demonstrations protesting
> Hu’s visit here.
Near Columbus Park in NYC perhaps? Falugong and Epoch Times is rather strong there, but my reading of the situation is that they are very out of touch with what is going on there.
> My purpose was not to digress from the central theme
> of the post - only to question assumptions
> about ‘China’s’ strength and stability, along
> with the Eurozone’s.
The tendency over the last ten to twenty years has been to vastly underestimate China’s strength and stability. China has huge numbers of problems, but none of them seem to me at least to be unsurmountable, and over the last ten to twenty years China has had a pretty good record of looking at its problems and fixing them.
The Communist Party of China has very few ideological principles, and that is why I think it is more successful than its opponents. The CCP will do anything to stay in power and listen to pretty much anyone that has any ideas on how it can keep itself in power. If you think that multi-party elections and freedom of speech will keep the CCP in power, they will listen. If you think that authoritarianism will keep the CCP in power, they will also listen.
Their opponents tend to be highly ideological. It may be the case that the Chinese model may be the best way of developing a country. I don’t know whether it is or it isn’t, but the alternate idea that “freedom and democracy will bring paradise” isn’t working in Iraq. The problem here is that the opponents of the CCP tend not to even be willing the think about or even consider the possibility or rationally discuss that the CCP might be right.
Ironically, this is why I think that a lot of the opponents of the CCP might be worse if they are in power than the CCP itself. If we knew what the truth was, there wouldn’t be any need for democracy or debate, and I’ve found that the opponents of the CCP to be so convinced of their ideological correctness and goodness and so convinced of the evilness of the Communist Party, that I think they would be highly dangerous if they were in power.
“A ‘Broken People’ in Booming India: Low-caste Dalits still face prejudice, grinding poverty” http://www.washingtonpost.com/wp-dyn/content/article/2007/06/20/AR2007062002535.html
“…Continued fast growth is critical. Millions of poor Indians need a reason to believe in their way of government… But growth will not, on its own, heal their divisions. Indeed, the extreme unevenness of India’s current enrichment is creating new splits. Amartya Sen, an economist and a more recent Nobel-prize winner, has given warning that the country’s west and south may come to look like California while the north and east is more like sub-Saharan Africa. To develop a unity that is not based on race or religion, Ms Nussbaum argues for the “public poetry” advocated by Tagore. That would be lovely but, as an ugly consumerism lays hold in India, almost unimaginable…” http://www.economist.com/books/displaystory.cfm?story_id=9359060
“How to make India’s funeral pyres more energy-efficient” http://www.economist.com/daily/columns/greenview/displaystory.cfm?story_id=9354014
“China and India demarcate an uneasy friendship” http://www.economist.com/daily/columns/asiaview/displaystory.cfm?story_id=9357067
“Organised by text messages and internet chats, China’s middle classes are daring to protest, and giving the government a fright.” http://www.economist.com/world/asia/displaystory.cfm?story_id=9367055
Mr. David Chiang: ” Of course, China is opposed to the politically biased IMF exchange surveillance for a legitimate reason.”
I think that part of the problem with IMF is the distribution of quotas and voting power. Existing voting power hardly reflects current account balances of the major players. For example: USA has 17.09 of IMF quotas, and 16.79% of voting power. China has 3.72% of quotas and 3.66% of voting power. Japan has 6.13% of quotas and 6.02% of voting power. India has 1.91% of quotas and 1.89% of voting power. Germany has 5.99% of quotas and 5.88% of voting power. Saudi Arabia has 3.21% of quotas and 3.17% of voting power. Russian Federation has 2.74% of quotas and 2.70% of voting power. http://www.imf.org/external/np/sec/memdir/members.htm#total. See also http://www.imf.org/external/np/sec/memdir/eds.htm
A world reserve currency should be independent of any one county currency; and independent of current account surplus or deficit. A world reserve currency should be convertible to an asset wanted universally: i.e. BW I, case of dollar and gold. If IMF became a Central Bank of Central Banks, and the SDR the main world reserve currency, then quotas and voting power would probably need to be revised substantially. It would appear some steps, longer term, in this direction are in progress at IMF. See http://www.imf.org/external/np/exr/ib/2007/041307.pdf
Quoting a German advisor to the Asian Development Bank, Mr. Doris Dumlao writes that “The proposed unified Asian currency unit (ACU) is moving forward with Southeast Asia plus China, Korea and Japan at the core of the initiative toward monetary integration…” At some point in time the ACU may become like the Euro, and given the strength of Asian economies, maybe the ACU will become the world reserve currency. http://business.inquirer.net/money/breakingnews/view_article.php?article_id=71800)
For now, India is excluded from the ACU. http://www.indianexpress.com/story/3761.html
The Chinese immigrants I know, along with the growing population here, are not Falun Gong. I don’t live in the U.S. nor did I read about the demonstrations (some of which were in this city) in a newspaper.
If you or LC can come up with a credible estimate of the number and type of executions, imprisonments and ‘peasant stompings’ (define?) that are acceptable to you.
If multi-party elections and freedom of speech were allowed, the CCP would not be the CCP.
India also has huge problems, but if its private sector is as vibrant reported, in spite of the problems, whether the Rupee may evolve into a currency that is more private sector driven, rather than government constrained - especially when so much of Indian private sector’s strength seems to be in industries that are turning into critical infrastructure for the financial sector.
“At some point in time [an] ‘ACU’ may become like the Euro” - along with the Euro’s faults and weaknesses.
perhaps, but I can’t see the rest of the world ever accepting an ACU as ‘the’ world reserve currency.
> If you or LC can come up with a credible estimate of > the number and type of executions, imprisonments
> and ‘peasant stompings’ (define?) that are
> acceptable to you.
One is too many, but the problem is that people tend to advocate political systems that aren’t workable, and that makes things worse. The solution that a lot of the people figure is that if you can get rid of the “bad evil people” with “good people” everything will be fine, and history has shown that things don’t work that way.
As far as executions, they have dropped sharply this year now that the Supreme People’s Court is reviewing them, and the number of peasant demonstrations has also dropped sharply because the central government is starting to fund local governments more. Right now it looks like working within the system gets more done, than trying to overthrow the government and turning China is another version of Iraq.
> If multi-party elections and freedom of speech were
> allowed, the CCP would not be the CCP.
The CCP doesn’t care what they are as long as they stay in power. If you can come up with a convincing case how multi-party elections and freedom of speech will make China stronger and keep the people in power, in power, then they will listen. The problem with that is that this requires people to at least consider the possibility that a one-party authoritarian system is the “least bad” one for China.
China has already been through two revolutions in which the “bad guys” were replaced with the “good guys” that turned out to be worse. I don’t think revolution is the answer. People are nice and wonderful once they are out of power, but the second you put them in power, they change. None of the people who want to overthrow the Chinese government (as opposed to people who just want to pressure the government to change something) have come anywhere to convincing me that they will behave better once power corrupts them (and power always corrupts).
Just a personal observation from several visits to China over the past decade. Under the current Hu-Wen administration, there is dramatically less politics involved in the daily lives of the average Chinese citizen today compared with under Jiang Zemin. Relegated to the dustbin of history are requirements to study manuscripts speeches of the the Chinese leadership. More or less, the Chinese have almost equal economic freedom to their counterparts in Western societies for entrepreneurship, vacation travel around the world, and even building capitalist stock market wealth. I fully concur that right now it looks like working within the system gets more done, rather than trying to overthrow the government and turning China into another bigger version of Iraq, but with real nuclear weapons uncontrolled.
With an aging and likely soon declining population, wouldn’t a stronger currency and a capital intensive domestic industry that’s competitive in a high JPY world be in Japan’s own interest? With a declining workforce, who is to staff Toyota’s Japanese factories in ten years time?
Latest Peter Schiff commentary on the “real” state of the overleveraged US Bubble Economy
http://www.financialsense.com/fsu/editorials/schiff/2007/0622.html
The truth is that the fundamental lack of appeal of Treasuries on the global market means that rates will rise considerably from here, which is very bearish for stocks indeed. Given the real rate of inflation (not the phony rate implied by the CPI) and the potential for a protracted decline in the value of the dollar, rates must rise significantly in order to convince overseas buyers to stay in the game.
However, a significant move up in interest rates will depress corporate earnings considerably. Not only do corporations themselves have debt to service, but so do their customers, particularly those with adjustable rate mortgages. If higher mortgage payments consume a greater share of discretionary income, then consumers will have less money to spend on other goods or services. Compounding the problem for stocks is the fact that while higher interest rates depress earnings, those diminished earnings themselves will need to be discounted by a higher factor: a double whammy for stock prices!
A bigger concern is the health of the over-leveraged U.S. economy itself. Interest rates high enough to offer an attractive yield to foreigners would be a disaster for U.S. consumers awash in credit card and adjustable rate mortgage debt, corporations issuing record amounts of low-rated bonds, and the Federal government itself, which continues to issue record amounts of Treasury bonds.
Ain t it obviours ?
Deflation in Europe and in the USA is probably the only remaining “tool” available to rebalance economies. If debt deflation hits the western shores, interest rates will fall, there won t be any interest rate differencial anymore.
Then Marx will have been proven right and the washington proven the crap it always has been … China and Japan are exporting deflation away, until it comes back towards them, with a revenge
Perhaps “deflation” is the much needed “equalizer” to global equity and to rid of greedy markets manipulators and government subsidies.
Better to export something than the US exporting “Do As I Say or I will … (how about the subtle of spanking) — does this mean the US will get spanked by itself, twice?
“perhaps, but I can’t see the rest of the world ever accepting an ACU as ‘the’ world reserve currency. ”
Hmm, then why are the Asian reserves growing faster than their trade surpluses?
don’t believe everything you read in the WSJ…
http://investing.reuters.co.uk/news/articleinvesting.aspx?type=tnBusinessNews&storyID=2007-06-22T201039Z_01_T264066_RTRIDST_0_BUSINESS-TOYOTA-US-DC.XML
and i think the point about investment/FDI and exchange rates is a fair one. japanese purchases of foreign firms was huge last year despite the weak yen, and in the biggest cases reinforced yen weakness vis-a-vis the pound (think Softbank/Vodafone, Japan Tobacco/Gallaher). for whatever reason, cross-border M&A doesn’t really seem affected much by exchange rates.
Guest:
Sorry, but by on the ground, I mean getting a visa to PRC and visit Shanghai, Guangzhou, Xinjiang, Lanzhou, Tibet, Henan, Sichuan. (Those are the places I have been too and stayed recently). I am not smart enough to know about number of people executed or understand political philosophy or even the merits of a democratic system versus the current Chinese one, but I do hear what people tell me and see things. Nothing less, nothing more.
Of course, depending on your ethnicity, nationality, gender, status, occupation and purpose, spend, interpersonal skills and connections, language - including dialect - very important, depth of experience in any one area, you will hear and (be allowed to) see very different things. I was simply asking if it was possible to get beyond the superficialities.
Knowing who and how many have been framed, incapacitated, intimidated (and in what ways) imprisoned and executed, for what purpose, with some speculation as to the impact on the surrounding community - assuming that ‘mass’ executions (if a number can be put on ‘mass’ in a country of 1.3 billion plus those beyond the borders) may not be required to ‘discipline’ the rest - this is a different type of intelligence.
There are many ‘guests’ here. Use of the handle is unnecessary, as you are addressing a disparate group. If you are responding to a specific post, date and time only is sufficient.
re: “then why are the ['Asian'] reserves [stuffed with USD] growing faster than their trade surpluses?”
sounds like you have your own informed view and I am sure everyone would be interested if you care to elaborate.
my only point was that it would not seem appropriate to replace one nation’s currency, which has become the de facto global reserve currency, with another regional currency unless it is possible, and deemed the best option to design and designate a representative mix of several regional currencies. Perhaps we need to differentiate a ‘globalization’ scenario from another which sounds more like a hostile takeover.
But your comment, along with others, has me thinking about the number of people beyond China’s/ Asia’s borders who may be firmly tethered by iron shackles, golden handcuffs and/or interpersonal relations that seem to involve untold sums of remittances.
If we are to progress to a truly global currency, I was wondering if India may have the capacity to (help) determine how that may happen, not to infer the end product would be called Rupee or the administrative center would be the RBI.
re: “cross-border M&A doesn’t really seem affected much by exchange rates.”
difficult to believe it isn’t affected. Only to suggest that it may involve different strategies and tactics in the ways it is managed.
The level of repression in China generally doesn’t extend to personal conversations. The government really doesn’t care what you say as long as you don’t organize, and I know tons of people in China that for one reason or another hate the government. Curiously, I don’t know anyone in China (including government officials themselves) that passionately loves the government, which I think is a good sign, since there is a healthy cynicism about the government. One good quote is that the difference between Chinese and Americans is that Chinese know that their government is lying to them.
The possibility that one is being lied to *is* a important concern since during the 1970’s the level of repression was high enough so that people were lying through their teeth to repeat the party line and telling leftists intellectuals what they wanted to here. I don’t think this is happening. There are a lots of signs that you can use to figure out. The big one is complexity. The party line is always a simple story, whereas people’s true opinions are generally very mixed and complex. The other thing is that (especially among young folks born after 1980) there are lots of people that very clearly and obviously don’t care about politics. From this, my belief that the CCP’s efforts at control more resemble Brave New World than 1984.
I should point out that business people generally do a much better job than academics at getting beyond superficialities. There really is no punishment for an academic that doesn’t try to see beyond their own frame of reference, but to run any sort of business you need to understand details and complexities.
Twofish
Really I think in economics, like anywhere else, the answers you get depend on the questions you allow yourself to ask.
Since most readers of this blog are convinced (as I am not) that China lies behind the whole imbalances issue, then maybe it isn’t surprising that a post which is essentially about why Honda has decided to recommence factory building in Japan (despite domestic labour supply shortages, an ageing workforce, very low immigration etc) and why the Yen is so low at this point, just one more time boils down to what China is up to. Personally I find it hard to see the connection here.
Admittedly Claus and I are in some respects no better, since we did obviously try to side-track things onto our own personal hobby horse, but arguably this perspective does give a better insight into what is actually happening in Japan. It isn’t sufficient to have a model which explains that if the Yen is lower Japan can export more, I would say that this should be obvious. To do something useful you also need to be able to explain why the Yen is so low, and why real wages continue to fall in Japan, which is presumably why they are thinking of building factories again.
Now since falling real wages in the context of reducing labour supply and continuing economic growth seems to cut against the grain of even basic Econ 101 thinking, Claus and I have been lead to dig a little deeper here. Doubly so, since we can see the same process at work in Germany. Now in Germany the situation is getting to be a bit clearer, given that, and contrary to expectations, Germany is outsourcing relatively higher skilled non-production work to Eastern Europe and accumulating a disproportionately large part of the low skill intermediate work in Germany. The logic behind this is relatively straightforward given that this reduces pressure on the domestic skill premium in the context of comparatively small young cohorts and a rapid expansion of knowledge-based services activity.
But the big question would be, is this also happening in Japan? Anyone have any insight? Why is Honda building a factory in Japan? I doubt it is a mid-term bet on the USD-Yen trade.
As I say, what you ask for is what you get in the research context, but my feeling is that the world is changing under your feet, and many of you are about to miss it all.
Now….
“The demographic information is really interesting, but in tremendous flux?”
Well, not really, it is in *transition*. Basically - in general - fertility is coming down almost everywhere, and most of the newly developing countries seem destined to hit the lowest-low level (below Tfr 1.3) sometime in the next 30 years or so (and especially since there is absolutely no global initiative on this front, given that, and as we can see here, this just isn’t considered to be an important issue) and life expectancy is on the way up. The only big “flux” issue is migration, and the question of why some OECD countries receive it in large quantities.
If you have taken the trouble to read this far, I will give you a clue: try housing booms (Dawn Mclaren in Arizona is monitoring this in the US context and now considers frontier crossings a leading economic indicator for the US economy). Again, in the EU look at the UK, Ireland, Spain and Greece.
And what conditions whether or not a society - given one and the same interest rate, good old ceteris paribus, which we can test for in the Eurozone - has a substantial boom? Well if you’ve been following the argument you’ve already got it: median age. Anyone care to point me to a society with a median age over 40 which has had a substantial housing boom post 2000?
Hello AC
“Some run big deficits (Spain, Hungary, Portugal)”
I think maybe you have misunderstood something here. This is a quote from Philip Lane and Gian Maria Milesi-Ferretti (who I basically disagree with). I have no problem with their statement of fact, but I would wish to point out that your issue would seem to be with them in this context, and not with me. My list of deficit examples was:
“Australia, New Zealand, the UK, Ireland, Greece, Spain, the US etc”
Now, Portugal is a very interesting and special case (for reasons I won’t go into here) but they do have a deficit, and they are under 40, so no problem here. As for Hungary, you say:
“Hungary has sufficit with Germany (and with the whole EU) in goods trade, and has huge deficit s with China and Russia”
Well either you are being very obtuse here, or you simply don’t see what is being argued. We are not talking about *bilateral* deficits here, and we are not essentially talking about *trade* deficits. You also need to look at capital flows. So - as I understand things, and please correct me if I am wrong - Hungary is running a small deficit on manufactured goods, a small trade surplus on trade when you take services into account, and a HUGE deficit on current account due to income repayments on the capital inflows.
“The German need for exports is indirectly fueling the deficits in Eastern Europe.”
Well I think it is important to note that I say “indirectly” and to point out that I am talking about the CA deficits here (which I agree I should have made clear). So what do I mean? Well I say indirectly, since I am talking about capital flows. You see Germany’s export dependence has two underlying drivers:
a) weak internal consumption
b) relatively high saving
It is this second point which concerns us here. Basically why was the ECB refi rate so low for so long? Essentially due to the drag coming on internal consumption coming from Italy and Germany. Clearly this rate wasn’t driven by the desire to fuel the housing booms in Ireland, Greece, Spain (or even France for that matter, and remember France is steadily becoming a deficit country, although I do not doubt that using what I essentially consider to be a “false Correlate” - ie China - I imagine others can try and mount an effective defence for another view in this case).
At present we are seeing a “sterling effort” on the part of the ECB to “normalise” the refi rate, but Claus and I would argue that given underlying structural weaknesses there are clear limits to how far they can go with this.
So, how does this fuel deficits in Eastern Europe. Well just look at the inflow of funds through the banking system. The central banks in Eastern Europe now have relatively little in the way of effective monetary policy tools, due to the high domestic demand for foreign-currency denominated (normally euro)loans. In the Latvian case 70% of all domestic lending is now euro denominated. In this situation the BoL is virtually helpless is the face of 33% y-o-y wage inflation.
Of course, in the case of Hungary you are right technically, since it isn’t Germany but Austria (which is just another example of the same phenomenon) who is in the middle (80% of Hungarian mortgages are in swiss francs, which are intermediated by the Austrian banks, which, as you probably know, have a major stake in the East European market).
“My feeling was that Europe is going rapidly into a current account deficit (if not already in there) mostly because of a solidly rising deficit with China, coming from a cheap yuan vs.the euro.”
Well the wheel comes full circle. I think this takes us back to where we started at the beginning of this post. What was it Nietzsche said “the eternal return of the same”? At least, alongside Camus, I take consolation in the idea of Sisyphus with a smile on his face.
Hi again Brad
“Core (or old in your terminology) europe exports capital to young europe on the periphery”
I don’t think I ever used the terminology “core” and “periphery” here (I mean, is France on the periphery?), but OK. I’m not going to kick and scream.
“(tho i suspects parts of eastern europe with large deficits are not-so-young)”.
Well, I’m afraid you only “suspect”, since curiously (ex-Bulgaria) these countries are still all under 40. What you have picked up, and which is the case, is that they are all about to age rapidly, very rapidly. According to the latest World Bank report all the big issues are going to go off between now and 2020 in labour supply terms, and this refers not only to Eastern Europe, but to the CIS and Central Asia. Russia is, it seems, already significantly dependent on an inflow of migrants, and this flow is likely to dry up at some point. But obviously Claus and I are not demographic reductionists, we are simply saying that demography is one (important) component, and that we smell a rat when there is no attempt whatsoever to factor this component in (recent example, the conference RGE monitor recently sponsored in Germany had not one paper which looked into this question). Claus and I would say that demographic, behavioural, technological and institutional factors are all at work in what is evidently a fairly complex picture. So:
“aging and demographics may help explain this, as does the institutional context of the european union”.
no problem here.
“old japan is exporting capital not to young asia”
Look, I think through all this debate we have been having there is a confusion about what “young” and “old” mean in this context. Let’s try a very rough and ready classification:
Elderly: median ages in the 40-44 range (this is where we are finding the structural characteristics Claus and I keep trying to talk about).
Mature: median age in the 34-40 range (this takes in Iceland just about I think, which must, along with possibly New Zealand, form the lower bound for this group)
Rapidly Maturing: let’s say median age 28 - 34. Upper bound maybe China, lower bound maybe India, these would be the countries getting what is normally termed the “demographic dividend”, although India is still probably 5 to 10 years away from getting the full force of the dividend.
Young: median age in the 17 to 28 range. These societies, in general, are still very much child dominated, and it is hard to get economic growth take-off without a substantial reduction in fertility.
Now, of course, all of this is rule of thumb, and pretty permeable at the edges,but it does give a framework. It is also important to note that the whole process is very much non-linear, since it isn’t simply a question of the younger you get the more chance of consumer credit driven growth you have (for example). There are clear cut off points moving downwards as well as upwards.
“but to the US, Australia, NZ, the Uk.”
Yeah, well this is the point. The really interesting dynamics to get to grips with is the interaction between the 34-40 and the 40-44 age groups, since, of course, in value terms, this is where all the action is. This is not to say that China is unimportant, it is increasingly so, but it will be very interesting indeed to watch how the Chinese dynamic evolves as she moves into the “mature economy” bracket.
“nor can a demographics driven explanation easily explain why the yen has depreciated so much against the euro — that is an old v almost as old flow ..”
Of course it can. This is the whole point. The Yen is so low right now due in large part to a change in home bias from Japanese retail investors. This change in home bias is being driven by the search for yield given the very low rates which prevail in Japan. Given the deflation background Japan has virtually become a monetary black hole for the global economy. This process can therefore go on for quite some time. If longer term rates where ever to be driven up by the outflow of funds this would start to slow growth internally and push up the yen, deflation would be given another good push onwards and downwards, the BoJ would rush back to quantitative easing, and we would be back where we started.
Look, the key issue to address is WHY the BoJ rate is so low, and why they have so much difficulty raising. The whole carry trade debate boils down to this really. Without an explanation of this phenomenon, what you have is Hamlet without the Prince.
“old v almost as old flow ..”
Also, you can only say this because you are following the silly practice - perpetuated by people like Philip Lane and Gian Maria Milesi-Ferretti - of treating European data in aggregate. There is “Elderly” Europe and there is “Mature” Europe, and if you don’t get the tweasers out and discriminate between these then you lose everything that is important about European imbalances IMHO.
“so i don’t quite think a demographics only explanation can work”
Well, obviously and clearly I do :).
Again, interesting Edward, thank you, but I am still not convinced!
And thank you Joseph, but:
re: “Chinese know that their government is lying to them” - if someone could tell ‘DC’
re: Chinese and Americans - anyone can go on to the internet, including this site, and find endless quantities of stuff, written by American journalists, agents, economists and academics, about all the ways American governments and firms lie. It seems that in China, much of this remains to be written - or at least made publicly available…
re: “The party line is always a simple story…” with every government. But as for what government is really doing - underlying objectives, strategies, tactics, ‘execution’, along with anything more than limited information about who benefits and how, seems to be unavailable - see previous point - perhaps with the SOE’s creating yet another layer of complexity, given the very blurred lines between business and government.
re: “Brave New World” Huxley’s version should we presume, although I find it no less disturbing…
i.e.: “A Chinese pharmaceutical company whose products include an injection for a drug overdose will start trading on Aim on Tuesday… The group’s first upcoming treatment, a liver cancer drug, has completed Phase 2 studies… In 2002, China had 55% of [the world's] liver cancer cases. The medicine is waiting to be approved by the Chinese food and drug agency, but has been delayed as the organisation continues its restructuring after corruption charges. The head of the agency was sentenced to death at the end of May for accepting 6.5m yuan (£433,000) worth of bribes from pharmaceutical companies to speed up the approval of new drugs…” http://business.guardian.co.uk/story/0,,2108782,00.html
“…For American journalists, there’s a tradition of showing up at a crime scene, or visiting a place that has made news. But in China, where press freedoms are weak, such visits can be dangerous. Last year, a young man working for a Chinese newspaper was beaten to death after he tried to meet the owners of an illegal coal mine… Many experts have told me that one of the most serious problems in China is that the government lacks the power to control the nation’s Wild West entrepreneurs, deal makers and connected factory owners. Bribery is rampant, and government corruption widespread…” http://www.nytimes.com/2007/06/24/weekinreview/24barboza.html?ref=business
Brad - “Decisions about where manufacturing capacity to supply the US (and for that matter global) markets is located now will shape trade outcomes for the years to come. Remember, a big reason why the trade deficit fell in the 1980s was that Japanese — and to a lesser extent German — automobile manufactures started shifting production to the US. Right now, the opposite is happening. Japanese producers of hybrids simply aren’t rushing to build US plants.”
Brad, I don’t believe that you spent any time reading and studying the Toyota corporate news releases and investor updates since 2000 in making your remarks. Otherwise, I would simply have to say that you don’t know what you’re talking about regarding what Toyota has done in the USA, North America, and globally regarding its overseas production vs. domestic production and exports from Japan. Frankly, you don’t a clue on the Toyota production statistics or plant starts and expansions since 2000 or you wouldn’t have made these statements.
I have all of the data. It does not read as you have portrayed it.
>>
re: “Frankly, you don’t a clue on the Toyota production statistics”
if you could establish your own credibility - the handle doesn’t do it - whether or not you have read Toyota corporate news releases and investor updates, let alone providing any insights into the ways you may choose to interpet that information.
“Guest” - “if you could establish your own credibility - the handle doesn’t do it - whether or not you have read Toyota corporate news releases and investor updates, let alone providing any insights into the ways you may choose to interpet that information.”
That’s laughable.
I was posting on Brad Setser’s web log long before you converted your first breath of oxygen on either of his blogs - the old one and this one. I don’t have a credibility problem. I don’t waste my time posting junk like some of the amateur stuff I’ve observed you throw up.
If you knew the history of my blogging name on message boards and blogs, you wouldn’t make such an ignorant comment.
I have done plenty of OEM consulting for the auto industry.
>
Brad,
I don’t have a lot of time as I am preparing for a couple of teleconferences and meetings, but here is some of the basic data from Toyota corporate that is available to the public. That’s all that I am willing to share, but it’s enough to make the point.
I believe that you will understand what I am talking about regarding your quick back of the envelope “analysis”. If not, I suggest more research.
See the following posts.
>
Toyota
Source:
Toyota Corporate News
http://www.toyota.co.jp/en/news/07/index.html
———
Toyota Vehicle Production
Japanese production
2000 - 3,429,209 (10.0%)
2001 - 3,354,424 (-2.2%)
2002 - 3,485,162 (3.9%)
2003 - 3,520,317 (1.0%)
2004 - 3,680,946 (4.6%)
2005 - 3,789,582 (3.0%)
2006 - 4,194,187 (10.7%)
2007 - 4,270,000 (2%) (projected)
00-06 Japanese production growth:
765,978 units
22.33%
Japanese exports
2000 - 1,706,210 (10.2%)
2001 - 1,665,719 (-2.4%)
2002 - 1,816,785 (9.1%)
2003 - 1,836,008 (1.1%)
2004 - 1,951,742 (6.3%)
2005 - 2,043,247 (4.7%)
2006 - 2,043,247 (4.7%)
2007 - 2,610,000 (3%)
00-06 Japanese exports growth:
337,037 units
19.75%
Overseas production
2000 - 1,751,315 (8.7%)
2001 - 1,780,252 (1.6%)
2002 - 2,150,520 (20.8%)
2003 - 2,557,979 (18.7%)
2004 - 3,042,728 (19.0%)
2005 - 3,571,303 (17.4%)
2006 - 3,898,975 (9.2%)
2007 - 4,200,000 (7%)
00-06 Overseas production growth:
2,147,660 units
122.63%
Worldwide production
2000 - 5,180,524 (9.5%)
2001 - 5,134,676 (-0.9%)
2002 - 5,635,682 (9.7%)
2003 - 6,078,296 (7.8%)
2004 - 6,723,674 (10.6%)
2005 - 7,360,885 (9.5%)
2006 - 8,093,162 (10.0%)
2007 - 8,470,000 (4%)
00-06 Worldwide production growth:
2,912,638 units
56.22%
==========
Toyota Vehicle Production
Note: (*yr on yr percentage increase)
CY 2000 RESULTS (as of Jan 25, 2001)
Japanese production - 3,429,209 (10.0%)
Overseas production - 1,751,315 (8.7%)
Worldwide production - 5,180,524 (9.5%)
Japanese Exports - 1,706,210 (10.2%)
CY 2001 RESULTS (as of Jan 24, 2002)
Japanese production - 3,354,424 (-2.2%)
Overseas production - 1,780,252 (1.6%)
Worldwide production - 5,134,676 (-0.9%)
Japanese Exports - 1,665,719 (-2.4%)
CY 2002 RESULTS (as of January 27, 2003)
Japanese production - 3,485,162 (3.9%)
Overseas production - 2,150,520 (20.8%)
Worldwide production - 5,635,682 (9.7%)
Japanese Exports - 1,816,785 (9.1%)
CY2003 RESULTS (as of January 26, 2004)
Japanese production - 3,520,317 (1.0%)
Overseas production - 2,557,979 (18.7%)
Worldwide production - 6,078,296 (7.8%)
Japanese Exports - 1,836,008 (1.1%)
CY 2004 RESULTS (as of Jan 25, 2005)
Japanese production - 3,680,946 (4.6%)
Overseas production - 3,042,728 (19.0%)
Worldwide production - 6,723,674 (10.6%)
Japanese Exports - 1,951,742 (6.3%)
CY 2005 RESULTS (as of Jan 26, 2006)
Japanese production - 3,789,582 (3.0%)
Overseas production - 3,571,303 (17.4%)
Worldwide production - 7,360,885 (9.5%)
Japanese Exports - 2,043,247 (4.7%)
2006 RESULTS (as of Jan 26, 2007)
Japanese production - 4,194,187 (10.7%)
Overseas production - 3,898,975 (9.2%)
Worldwide production - 8,093,162 (10.0%)
Japanese Exports - 2,529,293 (23.8%)
2007 Projections (as of December 22, 2006)
Japanese production - 4,270,000 (2%)
Overseas production - 4,200,000 (7%)
Worldwide production - 8,470,000 (4%)
Japanese exports - 2,610,000 (3%)
==========
Toyota Vehicle Production
Note: (*yr on yr percentage increase)
CY 2000 RESULTS (as of Jan 25, 2001)
Japanese production - 3,429,209 (10.0%)
Overseas production - 1,751,315 (8.7%)
Worldwide production - 5,180,524 (9.5%)
Japanese Exports - 1,706,210 (10.2%)
CY 2001 Expected Results (as of Dec 19, 2001)
Japanese production - 3,360,000 (-2%)
Overseas production - 1,790,000 (2%)
Worldwide production - 5,150,000 (-1%)
Japanese Exports - 1,660,000 (-3%)
CY 2001 RESULTS (as of Jan 24, 2002)
Japanese production - 3,354,424 (-2.2%)
Overseas production - 1,780,252 (1.6%)
Worldwide production - 5,134,676 (-0.9%)
Japanese Exports - 1,665,719 (-2.4%)
CY 2002 Projections (as of Dec 19, 2001)
Japanese production - 3,200,000 (-4%)
Overseas production - 2,070,000 (16%)
Worldwide production - 5,270,000 (2%)
Japanese Exports - 1,480,000 (-11%)
CY 2002 Revised Projections (as of Jul 29, 2002)
Japanese production - 3,450,000 (3%)
Overseas production - 2,100,000 (18%)
Worldwide production - 5,550,000 (8%)
Japanese Exports - 1,750,000 (5%)
CY 2002 Expected Results (as of Dec 17, 2002)
Japanese production - 3,480,000 (4%)
Overseas production - 2,160,000 (21%)
Worldwide production - 5,640,000 (10%)
Japanese Exports - 1,830,000 (10%)
CY 2002 RESULTS (as of January 27, 2003)
Japanese production - 3,485,162 (3.9%)
Overseas production - 2,150,520 (20.8%)
Worldwide production - 5,635,682 (9.7%)
Japanese Exports - 1,816,785 (9.1%)
CY 2003 Projections (as of Dec 17, 2002)
Japanese production - 3,390,000 (-3%)
Overseas production - 2,480,000 (15%)
Worldwide production - 5,870,000 (4%)
Japanese Exports - 1,710,000 (-7%)
CY 2003 Expected Results (as of Dec 18, 2003)
Japanese production - 3,520,000 (1%)
Overseas production - 2,570,000 (19%
Worldwide production - 6,090,000 (8%)
Japanese Exports - 1,830,000 (1%)
CY2003 RESULTS (as of January 26, 2004)
Japanese production - 3,520,317 (1.0%)
Overseas production - 2,557,979 (18.7%)
Worldwide production - 6,078,296 (7.8%)
Japanese Exports - 1,836,008 (1.1%)
CY 2004 Projections (as of Dec 18, 2003)
Japanese production - 3,540,000 (1%)
Overseas production - 2,970,000 (15%)
Worldwide production - 6,510,000 (7%)
Japanese Exports - 1,820,000 (-1%)
CY 2004 Expected Results (as of Dec 21, 2004)
Japanese production - 3,670,000 (4%)
Overseas production - 3,050,000 (19%)
Worldwide production - 6,720,000 (11%)
Japanese Exports - 1,950,000 (6%)
CY 2004 RESULTS (as of Jan 25, 2005)
Japanese production - 3,680,946 (4.6%)
Overseas production - 3,042,728 (19.0%)
Worldwide production - 6,723,674 (10.6%)
Japanese Exports - 1,951,742 (6.3%)
CY 2005 Projections (as of Dec 21, 2004)
Japanese production - 3,800,000 (4%)
Overseas production - 3,480,000 (14%)
Worldwide production - 7,280,000 (8%)
Japanese Exports - 1,990,000 (2%)
CY 2005 Expected Results (as of December 20, 2005)
Japanese production - 3,800,000 (3%)
Overseas production - 3,570,000 (17%)
Worldwide production - 7,370,000 (5%)
Japanese Exports - 2,050,000 (5%)
CY 2005 RESULTS (as of Jan 26, 2006)
Japanese production - 3,789,582 (3.0%)
Overseas production - 3,571,303 (17.4%)
Worldwide production - 7,360,885 (9.5%)
Japanese Exports - 2,043,247 (4.7%)
CY 2006 Projections (as of December 20, 2005)
Japanese production - 4,110,000 (8%)
Overseas production - 4,000,000 (12%)
Worldwide production - 8,110,000 (10%)
Japanese Exports - 2,350,000 (15%)
2006 Expected Results (as of December 22, 2006)
Japanese production - 4,200,000 (9%)
Overseas production - 3,920,000 (14%)
Worldwide production - 8,120,000 (12%)
Japanese exports - 2,530,000 (25% increase)
2006 RESULTS (as of Jan 26, 2007)
Japanese production - 4,194,187 (10.7%)
Overseas production - 3,898,975 (9.2%)
Worldwide production - 8,093,162 (10.0%)
Japanese Exports - 2,529,293 (23.8%)
2007 Projections (as of December 22, 2006)
Japanese production - 4,270,000 (2%)
Overseas production - 4,200,000 (7%)
Worldwide production - 8,470,000 (4%)
Japanese exports - 2,610,000 (3%)
——
Toyota Vehicle Production
Source documents
Jan 26, 2007
CY 2006 RESULTS
http://www.toyota.co.jp/en/news/07/0126.html
December 22, 2006
CY 2007 Projections
CY 2006 Expected Results
http://www.toyota.co.jp/en/news/06/1222.html
January 26, 2006
CY 2005 RESULTS
http://www.toyota.co.jp/en/news/06/0126.html
December 20, 2005
CY 2006 Projections
CY 2005 Expected Results
http://www.toyota.co.jp/en/news/05/1220.html
January 25, 2005
CY 2004 Results
http://www.toyota.co.jp/en/news/05/0125.html
December 21, 2004
CY 2004 Projections
CY 2003 Expected Results
http://www.toyota.co.jp/en/news/04/1221.html
January 26, 2004
CY2003 RESULTS
http://www.toyota.co.jp/en/news/04/0126.html
December 18, 2003
CY 2004 Projections
CY 2003 Expected Results
http://www.toyota.co.jp/en/news/03/1218b.html
January 27, 2003
CY 2002 RESULTS
http://www.toyota.co.jp/en/news/03/0127.html
Dec 17, 2002
CY 2003 Projections
http://www.toyota.co.jp/en/news/02/1217.html
July 29, 2002
CY 2002 Revised Projections
http://www.toyota.co.jp/en/news/02/0729_2.html
July 29, 2002
Cumulative North American Toyota Production Hits 10 Million Mark
http://www.toyota.co.jp/en/news/02/0729.html
January 24, 2002
CY 2001 Results
http://www.toyota.co.jp/en/news/02/0124.html
December 19, 2001
CY 2002 Projections
CY 2001 Expected Results
http://www.toyota.co.jp/en/news/01/1219.html
January 25, 2001
CY 2000 Results
http://www.toyota.co.jp/en/news/01/0125.html
—–
(continued)
Chronology of North American Production
*Specific entry dates and information provided below (dd/mm/yy) are tied to individual news releases; you can look them up via Toyota global corporate news (three exceptions, which can found under Toyota in North America news releases); Investment Cost Per Project is identified under many of the specific dd/mm/yy news releases. Similarly, production capacity gains are identified for new and expanded plant operations.
Legend:
NUMMI - California - New United Motor Manufacturing, Inc.
TMMA - Alabama - Toyota Motor Manufacturing, Alabama, Inc
TMMK - Kentucky - Toyota Motor Manufacturing, Kentucky Inc.
TMMC - Ontario, Canada
TMMI - Indiana - Toyota Motor Manufacturing, Indiana, Inc.
TMMNA - Kentucky-based - Toyota Motor Manufacturing North America, Inc.
TMMWV - West Virginia
1972 - Start of production of the truck bed at TABC
1984 - Start of operations at New United Motor Manufacturing, Inc. (NUMMI), a joint venture with GM, as the first Toyota production base in the U.S. Toyota began production in North America in December 1984 at New United Motor Manufacturing, Inc. (NUMMI), a joint venture with General Motors Corporation (GM) in California, USA (starting with GM’s Chevrolet Nova). The first Toyota to be produced in North America was the Corolla FX, which rolled off the line in NUMMI in September 1986, embarking Toyota on a 15-year, 10-month journey to the 10 million mark.
1985 - Start of production of the alloy wheel at Canadian Autoparts Toyota Inc. (CAPTIN)
1986 - Start of production of the Corolla FX at NUMMI
1988 - Start of production of the Camry at Toyota Motor Manufacturing, U.S.A., Inc. (TMM) (now Toyota Motor Manufacturing, Kentucky Inc. (TMMK))
1988 - Production of Toyota vehicles in North America took a big leap in 1988 with the opening of Toyota Motor Manufacturing, Kentucky, Inc. (TMMK), in Kentucky, USA, and Toyota Motor Manufacturing, Canada, Inc. (TMMC), in Ontario, Canada. Next, came the start of operations of Toyota Motor Manufacturing, Indiana, Inc. (TMMI), in Indiana, USA, in 1998.
1988 - Start of production of the Corolla at Toyota Motor Manufacturing, Canada, Inc. (TMMC)
1989 - Start of production of the engine at TMMK
1991 - Start of production of compact pickup truck model (renamed the Tacoma in 1995) at NUMMI
1993 - Cumulative production of the Camry reaches 1 million units
1994 - Start of production of the Avalon at TMMK
1995 - Start of production of the engine at TMMC
1996 - Toyota Motor Manufacturing North America, Inc. (TMMNA) established
1997 - Start of production of the Sienna at TMMK
1997 - Cumulative production in North America reaches 5 million units
1998 - Start of production of the Tundra at Toyota Motor Manufacturing Indiana, Inc. (TMMI)
1998 - Start of production of the Camry Solara at TMMC
1998 - Start of production of engines at Toyota Motor Manufacturing, West Virginia, Inc. (TMMWV)
1999 - Cumulative production in Canada reaches 1 million units
2000
2000 - Start of production of Sequoia at TMMI
2000 - Start of production of Camry Solara convertible at TMMC
2001
2001 - Toyota’s annual production of approximately 14,000 units in 1986 rose to about 1.09 million units by 2001, spanning four TMC affiliates.
2001- NUMMI 2001 production excluding GM vehicles - 305,691 - Corolla, Tacoma, Voltz, GM Pontiac Vibe
2001 - TMMK - 2001 production - 446,199 - Avalon, Camry, Sienna
2001- TMMC - 2001 production -166,131 - Corolla, Matrix, Camry Solara
2001- TMMI - 2001 production - 170,442 - Tundra, Sequoia
2001 - Groundbreaking ceremony at Toyota Motor Manufacturing, Alabama, Inc.
February 6, 2001 - Toyota to Build V8 Engines in Alabama
May 10, 2001 - Toyota’s West Virginia Powertrain Facility Lauches First Toyota Automatic Transmission Production outside of Japan
2002
2002 - Start of production of the Matrix at TMMC
2002 - Start of production of the Voltz, jointly developed with GM, at NUMMI
2002 - As part of its plans to increase annual production capacity in North America to 1.45 million units in 2003, Toyota strengthened its local efforts this year by launching production at NUMMI of the Toyota Voltz—jointly planned and developed by TMC and GM, as well as that of the Matrix at TMMC, which plans to begin making the Lexus RX300 in 2003.
January 5, 2002 - Toyota Announces New Plant in Mexico
July 2002 - Starting with Toyota Motor Manufacturing North America, Inc. (TMMNA)—a Kentucky-based company that oversees Toyota’s North American manufacturing operations, three days of ceremonies beginning today will take place at the above four TMC vehicle-making affiliates to celebrate reaching the 10 million unit milestone.
September 17, 2002 - Toyota to Expand Production in Canada (Toyota In Cambridge Creates 700 New Jobs) — TMMC
September 20, 2002 - Toyota Announces Tacoma Truck Assembly Plant in Tijuana
2003
2003 - Start of production of the Lexus RX300 at TMMC planned
2003 - As part of its plans to increase annual production capacity in North America to 1.45 million units in 2003, Toyota strengthened its local efforts this year by launching production at NUMMI of the Toyota Voltz—jointly planned and developed by TMC and GM, as well as that of the Matrix at TMMC, which plans to begin making the Lexus RX300 in 2003.
February 5, 2003 - Investment: $800 million - Toyota to Build Vehicle Plant in U.S. State of Texas - New Facility to Produce Tundra Pickup Trucks from 2006
March 28, 2003 - Investment: $124 million - Tennessee to Become Home of Toyota Engine Block Plant - New Unit to Supply Toyota Engine Production Facilities in North America - Toyota’s first wholly owned plant in the state of Tennessee
May 13, 2003 - Toyota’s Alabama Engine Plant Rolls Out Its 1st V8 - first ever produced by Toyota outside of Japan
June 2, 2003 - TABC ANNOUNCES 4-CYLINDER ENGINE ASSEMBLY - TOYOTA PARTS PLANT EXPANDS CAPABILITIES
July 15, 2003 - Toyota to Build V6 Engines at Alabama Plant
August 18, 2003 - Toyota Announces Second Expansion of Baja California Plant
September 29, 2003 - First Luxury Lexus Built Outside of Japan Rolls off the Line in Cambridge, Ontario
2004
April 13, 2004 - Toyota Expansion at West Virginia Plant
September 27, 2004 - Toyota’s Alabama Engine Plant to Boost Production Capacity from 120,000 units/year to 400,000 units/year
November 25, 2004 - Overseas Production Continues To Increase
2004
February 2, 2005 - Toyota Celebrates Grand Opening of Tijuana Plant
May 2, 2005 - Toyota’s West Virginia Plant Expands - Automaker to Manufacture Additional Automatic Transmissions
2005
May 6, 2005 - Toyota U.S. Subsidiary Bodine Aluminum to Expand in Tennessee
May 18, 2005 - Toyota to Start Production of Hybrid Vehicles in North America at Toyota Motor Manufacturing, Kentucky, Inc. (TMMK)
July 1, 2005 - Toyota to Expand North American Manufacturing Operations — New Canadian Plant to Produce RAV4 from 2008
August 3, 2005 - Toyota to Increase Investment at Texas Plant
2006
January 23, 2006 - Toyota Announces Expansion of Mexican Plant
February 8, 2006 - Toyota to Raise Production Capacity of 2nd Canadian Plant
February 13, 2006 - Toyota Opens North American Production Support Center
March 13, 2006 - Fuji Heavy Industries’ U.S. Plant to Build Toyota Camry
April 4, 2006 - Toyota Launches Consolidated R&D and Manufacturing Company in North America
September 9, 2006 - Toyota Breaks Ground for New Research Facilities in U.S.
October 13, 2006 - Toyota Starts Hybrid Vehicle Production in North America
November 18, 2006 - Toyota Begins Tundra Production at Texas Plant
2007
February 28, 2007 - Toyota to Build Vehicle Plant in Mississippi, U.S.A.
February 28, 2007 - Toyota production capacity in North America in 2008 is expected to reach 2.02 million vehicles (current capacity is 1.75 million vehicles) annually as a result of the increased production capacity at the North American production site of Fuji Heavy Industries Ltd. (Subaru of Indiana Automotive, Inc.) to 100,000 vehicles per year of the Camry; production of which will be outsourced by Toyota beginning in 2007; an increase in production capacity in 2007 by 20,000 vehicles per year at Toyota Motor Manufacturing de Baja California, Mexico; and the additional production capacity of 150,000 vehicles per year at the No. 2 Plant of Toyota Motor Manufacturing, Canada, Inc., where production is expected to begin in 2008.
April 19, 2007 - Toyota Breaks Ground for Mississippi Plant - Investment of $1.3 billion U.S. dollars
The TMMMS plant will be Toyota’s eighth vehicle production plant in North America, and from around 2010 will manufacture the Highlander SUV. Following the start of operations at TMMMS, Toyota’s North American annual production capacity will rise to 2.17 million vehicles.
This development is expected to bring Toyota’s North American annual production capacity to 2.17 million vehicles, including the start of OEM production of the Camry sedan at Fuji Heavy Industries Ltd.’s Subaru of Indiana Automotive, Inc. (100,000 units annually) and expanded production capacity for the Tacoma pickup truck at Toyota Motor Manufacturing de Baja California in Mexico (increase of 20,000 units), both in 2007, and the opening of the Woodstock plant of Toyota Motor Manufacturing, Canada, Inc. for the RAV4 SUV in 2008 (150,000 units annually).
April 20, 2007 - Camry Production Begins In Indiana $230 million investment at Subaru plant; production capacity of 100,000 Camry vehicles per year; In March 2006, SIA parent Fuji Heavy Industries (FHI) and Toyota announced a collaborative agreement that would include Camry production at SIA.
>>
Brad,
I will close out with a discussion of this summary data available from publicly released Toyota statements:
Toyota Vehicle Production
Japanese production
2000 - 3,429,209 (10.0%)
2001 - 3,354,424 (-2.2%)
2002 - 3,485,162 (3.9%)
2003 - 3,520,317 (1.0%)
2004 - 3,680,946 (4.6%)
2005 - 3,789,582 (3.0%)
2006 - 4,194,187 (10.7%)
2007 - 4,270,000 (2%) (projected)
00-06 Japanese production growth:
765,978 units
22.33%
Japanese exports
2000 - 1,706,210 (10.2%)
2001 - 1,665,719 (-2.4%)
2002 - 1,816,785 (9.1%)
2003 - 1,836,008 (1.1%)
2004 - 1,951,742 (6.3%)
2005 - 2,043,247 (4.7%)
2006 - 2,043,247 (4.7%)
2007 - 2,610,000 (3%)
00-06 Japanese exports growth:
337,037 units
19.75%
Overseas production
2000 - 1,751,315 (8.7%)
2001 - 1,780,252 (1.6%)
2002 - 2,150,520 (20.8%)
2003 - 2,557,979 (18.7%)
2004 - 3,042,728 (19.0%)
2005 - 3,571,303 (17.4%)
2006 - 3,898,975 (9.2%)
2007 - 4,200,000 (7%)
00-06 Overseas production growth:
2,147,660 units
122.63%
Worldwide production
2000 - 5,180,524 (9.5%)
2001 - 5,134,676 (-0.9%)
2002 - 5,635,682 (9.7%)
2003 - 6,078,296 (7.8%)
2004 - 6,723,674 (10.6%)
2005 - 7,360,885 (9.5%)
2006 - 8,093,162 (10.0%)
2007 - 8,470,000 (4%)
00-06 Worldwide production growth:
2,912,638 units
56.22%
—–
If you know what is happening within Toyota and as summarized above, it’s clear that Toyota has expanded its overseas production facilities (in-house, joint venture, and subcontract) substantially more than the corporate has ramped up domestic production in Japan to support export growth demands.
The numbers speak for themselves, but there is substantial commentary from Toyota corporate that explains where the overseas market growth has occurred and what region has received the bulk of exports from its Japanese domestic production plants.
The bottom line, 2000-2006:
00-06 Japanese exports growth:
337,037 units
19.75%
00-06 Overseas production growth:
2,147,660 units
122.63%
Similarly, 2007 projections from Toyota corporate indicate that it is anticipated that Toyota’s overseas production will continue to grow, outpacing its Japanese domestic production growth both in units and as a percentage (units, of course, being the more important number). The expectation is that overseas production will almost equal Toyota’s domestic production. Compare that to Toyota’s production spread back in 2000.
2007 Projections (as of December 22, 2006)
Japanese production - 4,270,000 (2%)
Overseas production - 4,200,000 (7%)
Worldwide production - 8,470,000 (4%)
Japanese exports - 2,610,000 (3%)
CY 2000 RESULTS (as of Jan 25, 2001)
Japanese production - 3,429,209 (10.0%)
Overseas production - 1,751,315 (8.7%)
Worldwide production - 5,180,524 (9.5%)
Japanese Exports - 1,706,210 (10.2%)
Toyota’s production expansion in North America and the USA has been substantial since 2000. No question. And that production expansion includes production of hybrid vehicles. That trend is anticipated to continue.
Toyota’s decision to slow its plant build operations in the USA is a well reasoned decisions based not only on U.S. economic conditions related to automobile sales, but also firm in the knowledge that other OEMs are coming to the party on hybrid and other fuel improvement vehicle platforms. Toyota corporate is wise to take a pause at this time.
There is much more worthy of discussion, but that’s enough to chew on.
Take care, Brad.
All the best.
>>
MG — not sure what exactly you are objecting too.
1) i think it is a fairly well established fact (I have posted the relevant links previously) that an increase in japanese production in the us helped reduce the US deficit in the 80s
2) the data you posted are total japanese production (and toyota japanese production) v. total global production. they don’t specifically address the question of whether Toyota’s US sales are growing faster than their US production (Toyota is also building capacity outside the US), best i can tell (let me know if this wrong).
3) You are right that i didn’t do original research for this post, but all the facts I mentioned — the fall in toyota’s US production relative to US sales (that implies ongoing increases in toyota’s us production) and higher relative profitability on their Japanese than US production and the recent deicision to ramp up investment in japan rather than the US — are all sourced to WSJ articles. If any of those specific facts are wrong, let me know.
I too am busy this week, so i cannot wade through all relevant data.
Brad,
Ok, the problem I have with your summary and the WSJ articles among other sources is that Toyota’s North American and U.S. production capability is still ramping up, not leveling off. The North American and U.S. production capacity increases will continue through 2010 and perhaps beyond. That is not a negative. The production capacity gains to be realized from now through 2010 do not include further efficiency improvements or plant expansions not announced or confirmed. Toyota has demonstrated a track record of expansion and improvements as necessary to augment vehicle and component production demand.
The production capacity gains by 2010 are on the order of 420,000 vehicles above the February 2007 production capacity level. That’s 420,000 more per year in capability. Cumulatively, the gains will represent a jump from 1.09 million production capacity in 2001 to 2.17 million production capacity in 2010. That’s quite a move. Yet, the commentary makes it sound like Toyota’s North American and U.S. investment in production facilities was stopped dead in its tracks or rolled back three years ago. Nothing could be further from the truth. Two new plants are under construction now - they’re not on line yet. Meanwhile, production capacity gains have occurred every year during the past three years. In fact, production gains have occurred every year since 2000.
I will provide the 2006 calendar year sales data for the U.S. market, but I offer a word of caution as you read it. Bear in mind that 2006 was not the best year across the board for automobile sales, even for Toyota. While Toyota did continue to march forward with sales increases, there needs to be an appreciate for where the gains occurred and did not occur. I can’t stress this point enough. Similarly, let us be clear in understanding that some of the Toyota models are not manufactured outside of Japan - for any market. So, those gains are not sales increases that should be counted against North American or U.S. productivity and plant assets. Rather, those vehicles are targeted to a difference customer base - some which do not take as much of a hit during an economic downturn. We are not talking apples to apples in all cases.
Let me observe that there is about a five year minimum planning to land acquisition and plant build window that needs to be considered for each plant brought on the production line. The expansions of existing plants run a shorter cycle, of course, as do joint ventures with existing plant facilities (normally) and contracted out production - some of which Toyota is doing in the USA. Toyota was still announcing ‘go forward’ plans in 2006. The last two plants under construction represent that corporate effort.
Following the sales data for 2006 (below), I will walk you back to specific information and data on the production capacity improvements that have occurred since 2001. I believe that those gains in vehicle production capacity are being sold short by some journalists and so-called “experts”. An upward movement of over 1 million units in production capacity is not to be ignored or downplayed. Toyota corporate has made substantial investments and production capacity gains in North America and the USA since 2000 and certainly since 2004. I am referring to large jumps in capability to manufacture vehicles, engines, transmissions, and other subassemblies, all of which are documented. The investment has been significant, well into the billions - since 2000 and 2003.
I will point out again:
00-06 Japanese exports growth:
337,037 units
19.75%
00-06 Overseas production growth:
2,147,660 units
122.63%
It is the case that Toyota’s 2007 exports from Japan will jump considerably. Take into account, though, that Toyota’s models are on a roll - from the small to the large platforms, with the exception a few fuel hogs like the Land Cruiser. Mercedes and GM are clipping their wings on that front. That will get worse next year with GM’s hybrid SUVs - the large ones.
Ok, here we go.
>
Toyota Reports 2006 and December Sales
01/03/2007
Torrance, CA
Revised: 01/19/2007
http://pressroom.toyota.com/Releases/View?id=TYT2007010356633
“2006 was a respectable year for the industry if you consider the strain of erratic fuel prices and a housing bubble on an industry weaning itself from incentives,” said TMS Executive Vice President Jim Lentz.
*TMS - Toyota Motor Sales (TMS), U.S.A, Inc.
—-
Toyota Sales - United States Market
CALENDAR YEAR 2006 Sales
Model - 2006 - 2005 - % Change
YARIS………70,308……..0 -
COROLLA…387,388….341,290 13.9
CAMRY……448,445….431,703 4.2
AVALON……88,938……95,318 -6.4
PRIUS…….106,971….107,897 -0.5
SCION xA….32,603……28,033 16.7
SCION xB….61,306……54,037 13.8
SCION tC….79,125……74,415 6.7
TOTAL TOYOTA DIV. PASS. CAR..1,275,119….1,138,130 12.4
—-
ES 350………75,987….67,577 12.8
LS 430/460…19,546….26,043 -24.7
SC 430……….5,847……8,360 -29.8
GS 300………23,665….27,807 -14.6
GS 430/450h…3,725……5,650 -33.9
IS 250/350….54,267….15,789 244.8
TOTAL LEXUS PASS. CAR…….183,037……151,226 21.4
TOTAL TOYOTA PASS. CAR..1,458,156….1,289,356 13.5
——-
SIENNA……………163,269…..161,380 1.5
RAV4………………152,047……70,518 116.3
FJ CRUISER………..56,225……….0 -
4RUNNER………….103,086…..103,829 -0.4
HIGHLANDER……..129,794……137,409 -5.2
LAND CRUISER……..3,376………4,870 -30.5
SEQUOIA…………..34,315…….45,904 -25.0
TOTAL SUV……….478,843…..362,530 32.5
4X2 TACOMA…….105,127……100,568 4.9
4X4 TACOMA………73,224…….68,263 7.6
TOTAL TACOMA….178,351…..168,831 6.0
TUNDRA…………..124,508……126,529 -1.3
TOTAL PICKUP……302,859……295,360 2.9
TOTAL TOYOTA DIV. LT TRUCK…944,971…819,270 15.7
—-
LX 470………………5,595…..8,555 -34.4
GX 470…………….25,454….34,339 -25.6
RX 350/400h……..108,348..108,775 -0.1
TOTAL LEXUS LIGHT TRUCK……..139,397…..151,669 -7.8
TOTAL TOYOTA LIGHT TRUCK…1,084,368…..970,939 12.0
—-
TOTAL TOYOTA DIV…………….2,220,090…1,957,400 13.8
TOTAL LEXUS………………………322,434……302,895 6.8
TOTAL TOYOTA………….2,542,524…2,260,295 12.9
MEMO:
DOM. COROLLA……335,054…..331,049 1.5
DOM. CAMRY………364,622…..402,896 -9.2
DOM. PICKUP………302,859…..295,360 2.9
DOM. RX 350………..75,508……67,589 12.1
TOYOTA DIV. IMPORT CAR………..486,505…..308,867 58.0
LEXUS IMPORT CAR………………..183,037…..151,226 21.4
TOYOTA DIV NA BUILT CARS……..788,614…..829,263 -4.6
TOTAL TOYOTA CARS……………1,458,156…1,289,356 13.5
—-
TOYOTA DIV. IMPORT LT TRUCK….444,528….316,626 40.9
LEXUS IMPORT LT TRUCK……………63,889……84,080 -23.8
TOYOTA DIV NA BUILT LT TRUCK…500,443….502,644 -0.1