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Bill Radke: Toyota cannot seem to make up its mind about where it wants to build the Prius. Right now, they’re all built in Japan. But there’s been talk of building the Prius in the U.S. Marketplace’s Alisa Roth says with the yen at all-time highs against the dollar, the idea is sounding practical everyday.
Alisa Roth: Let’s say the dollar is weak. Like it is right now. You may not care that your Prius is made in Japan. But when you buy it with dollars, Toyota makes less money. Because those dollars are worth less when the company converts them back to yen.
David Solin is a consultant at Foreign Exchange Analytics. He says the way carmakers get around that currency risk is to set up shop over here.
Solin: The bottom line is that the more dollars that they expect to take in, the more exposure they have by not manufacturing in the U.S.
But currencies can be weak one day and strong the next. And getting a plant going can take months or even years.
John Casesa is an auto-industry consultant. He says a company can’t just start producing cars in another country on the fly.
John Casesa: So the company’s gotta take a view that trends in the currency market will persist for some time, for years.
Casesa says the exchange rate isn’t the only thing companies consider when they think about where to build plants. They also look at things like demand, shipping costs and a market’s potential to grow.
I’m Alisa Roth for Marketplace.
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