Seesawing foreign exchange rates are threatening to squeeze profits for Japanese automakers just as they intensify their efforts -- and their spending -- in the United States. The changing reality of yen and dollars and other world currencies is crashing a three-year profit party at Toyota Motor Corp. After leading Toyota through three straight years of record profits, Toyota President Akio Toyoda warned last week that times are changing and that the company now must brace for a big profit plunge.
Across the Japanese industry last week, automakers revealed a dimmer outlook for 2016 after chalking big profits, in some cases records, in the just-ended fiscal year. That will complicate life not only for Toyota, but for Nissan, Honda, Subaru and Mazda this year: All of them are engaged in major capital spending programs in North America, expanding production footprints and entering new vehicle segments, as well as facing down a more expensive U.S. new-car market with slowing growth and rising incentive spending.
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