Carmakers expand local production to limit currency exposure

Peugeot Parts

PSA Peugeot Citroen Chief Executive Officer Philippe Varin said his company is also trying to build where it sells.

“When you are a generalist carmaker, you have to be close to the markets that you serve, so that you are not exposed to currencies,” the executive said at the car show. “The future will be more local exposure.”

Nissan still sees “headwinds” from the yen and aims to produce and sell in the same market to avoid exchange risk rather than hedge, Andrew Palmer, Nissan executive vice president, told reporters today in Geneva. A rate of 100 yen to the dollar is considered “neutral,” he said.

Toyota’s European research and development chief Masahisa Nagata said yesterday that the yen is still too strong and an appropriate rate is 130 per euro.

“We’re currently keeping in our forecasts exchange rates at 105-110 even if it’s currently at 121-123,” Leroy said. “We don’t want to slacken by saying ‘the exchange rate is perfect, we’re in the best of all worlds.’ We really want to have a cautious business model.”

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