Mazda a Homebody as Japanese Rivals Boost U.S. Output

Mazda may be zigging with its decision to bet heavily on making more of its vehicles in Japan and exporting them in the nation's classic Japan Inc. way. But all of its Japanese rivals are zagging — and sinking unprecedented amounts into building up their manufacturing presence in North America, as the lofty yen gives them little choice but to do so for currency hedging.

The little automaker has declared that 90 percent of the output of its new CX-5 crossover, in Japan, will be aimed for export and that it can make a profit on sales to the U.S. even if the yen continues to appreciate against the dollar.

The key, Mazda executives told the Wall Street Journal, is a basket of technologies sub-branded as Skyactiv, a series fo engines, transmissions and chassis that are more fuel-efficient, lighter and less expensive to make than previous components. Mazda has been advertising Skyactiv as a key reason to buy its vehicles in the U.S. Mazda recently pulled out of its only U.S. plant, a Michigan facility whose output it shared with Ford.

But meanwhile, Toyota, Honda, Nissan, Mitsubishi and Korea-based Hyundai are each beefing up their North American vehicle output, especially in the U.S., to record levels because they've been trying for too long to beat the currency-differential problem, and they aren't getting anywhere.

Add to that the necessity for most Japanese manufacturers to continue to catch up inventories because of the disastrous hits their supply chains took in 2011, and Japanese auto manufacturers have become some of the biggest contributors to any momentum the U.S. economy is enjoying besides oil-and-gas drillers in North Dakota.

"Our fundamental philosophy is produce where we sell," Tom Lake, Honda's head of North American purchasing, told Automotive News. "The philosophy hasn't changed, but the urgency has stepped up."

More than 87 percent of the Honda and Acura models sold in the U.S. through June of this year were made in North America, up from 84 percent a year earlier. Honda recently announced, for instance, that it plans to boost capacity by 25 percent at its plant in Greensburg, Ind., and launch production of the Civic Hybrid there next year.

Meanwhile, Mitsubishi has launched production of its new Outlander Sport compact SUV in Normal, Ill., in a move that eventually will double output and turn the plant into an export hub. Hyundai — whose continued tight inventories actually have begun to hurt the company's long-rising U.S. market share — also plans to add a third shift in September to the Montgomery, Ala., factory where it builds Sonata and Elantra cars.

It would be somewhat ironic if investment by Japanese automakers could help the American economy avoid its own "lost decade" like that experienced by the Japanese economy in the Nineties.