Japanese automakers ride currency manipulation to a heckuva third quarter

Posted by mmcmullan on 10/28/2013

Toyota won the third quarter in global auto sales. The Japanese automaker and its subsidiaries outpaced first runner up General Motors, selling 2.5 million to GM’s 2.4 million between July and September. How’d they do it? Abenomics, which is a charming and whimsical way for economics editors to say “currency manipulation.”

Since Japanese Prime Minister Shinzo Abe climbed back to the top of Tokyo’s political heap last year, he’s made goosing Japan’s moribund economy one of his chief concerns. He’s put a lot of easy money out there – and since then?

The yen has fallen about 11 percent against the dollar in 2013, creating a tailwind for Japanese brands as they face the most competitive lineup of vehicles from GM, Ford Motor Co. and Chrysler Group LLC in a generation.

A tailwind indeed. Honda, Subaru and Nissan all reported significant sales bumps, despite facing a competitively priced American line-up. As noted later in the article, Ford CEO Alan Mulally has raised issue with Japan’s currency policy, and thinks to reward such anticompetitive behavior with inclusion in the massive Trans-Pacific Partnership (TPP) is a bad idea. Here’s what he told the Tom Walsh of the Detroit Free Press back in August:

’I think manufacturing in this country matters a lot. … It matters to (Michigan). We’re not only just getting back on our feet, but as you know, really hitting on all cylinders. (Ford is) hiring lots of Americans for both blue-collar and white-collar jobs. But a bad trade agreement could jeopardize that, and we will not let that happen.’

Do you agree? We hope you do. If you’re on board with American manufacturing, tell President Obama that a trade deal that puts American jobs at risk is not a deal at all. Let’s address currency manipulation via the TPP!

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