UPDATE 1-Prolonged yen strength a "big problem"-Toyota chief

* Toyota head sees prolonged yen strength as “major crisis”

* Future of Japan’s manufacturing sector seen at stake

* Toyota to revise exchange rate assumptions – president

(Adds quotes and background)

TOKYO, Oct 26 (BestGrowthStock) – Toyota Motor Corp (7203.T: )
(7203.T: ) President Akio Toyoda said on Tuesday prolonged
strength in the yen was a big problem and could threaten the
competitiveness of Japanese manufacturing.

Like many Japanese automakers, Toyota has set its dollar
rate assumption at 90 yen — about 10 yen weaker than current
rates (JPY=: ) — implying a 150 billion yen ($1.85 billion)
currency loss in the October-March half if it assumed 80 yen
instead.

Asked in an interview on Japanese TV whether Toyota intended
to revise its currency assumption, Toyoda said: “Obviously there
is a big discrepancy against current exchange rates, so we will
revise the assumption at the appropriate time.”

Asked if the revision would be to somewhere between 80 and
89 yen, he said, “That’s probably fair.” Toyota, the world’s
biggest automaker, is scheduled to announce its July-September
second quarter results on Nov. 5.

Japanese automakers are scrambling to cut costs and sell
more cars to offset the damage from a stronger currency.

But Toyota is in a tougher spot than rivals Nissan Motor Co
(7201.T: ) and Honda Motor Co (7267.T: ) because it builds a
relatively high 40-45 percent of its vehicles in Japan,
exporting about half of that.

But Toyoda, grandson of the automaker’s founder, said he was
more worried about the future of Japanese manufacturing than the
short-term impact on Toyota’s bottom line.

“Rather than the impact on our profits, the fact that this
kind of (dollar-yen) level has lasted this long is a major
crisis for Japanese ‘monozukuri’,” he said, referring to Japan’s
culture of manufacturing that has been responsible for the
success of the country’s auto industry.

“Toyota has grown strong and evolved by making cars for
Japanese customers, who are some of the toughest customers in
the world. That’s how we have expanded in the world.

“If this (foreign exchange) level continues, it is a big
problem. It could threaten the very foundation (of monozukuri),”
he said.

That echoed comments made earlier in the day by Nissan Chief
Operating Officer Toshiyuki Shiga, who also heads Japan’s auto
industry lobby.

Japan’s finance minister also warned on Tuesday the
government would “act decisively” in markets if needed and
expressed Tokyo’s irritation with the yen’s climb to another
15-year high. [ID:nTOE69O09F]

Toyoda noted that Toyota builds about 3 million vehicles in
Japan — out of about 7 million units last year — and that his
company would have to find a way to protect that level of
domestic production.

“For Toyota to be Toyota, we want to maintain a certain
level of R&D and production in Japan. But the current reality is
that conditions are very much working against us. I feel a huge
sense of crisis about this.”

For more coverage of the yen see [ID:nECONJP]

(Reporting by Chang-Ran Kim; Editing by Michael Shields)

UPDATE 1-Prolonged yen strength a "big problem"-Toyota chief