Japanese automakers add plants and jobs

updated 2:23 p.m. ET April 10, 2007

TOKYO - At a time when Detroit's "Big Three" are closing plants and slashing jobs to revive their ailing business, their Japanese counterparts are busy opening plants in Japan for the first time in decades.

That's because there's strong demand for fuel-efficient small cars such as the Toyota Yaris and Honda Fit — all of which are made in Japan — as well as luxury models and hybrids, most of which are made here.

But there's also a shift away from the conventional wisdom that automakers are best off making cars in the same region where they sell.

Toyota, Nissan and Honda realize that the roots of their success lie in the management and production strategies developed and honed at home — from outstanding quality control to their extensive supplier networks — and that expanding in Japan may be the smartest way to meet demand for certain types of vehicles.

"It doesn't make sense to produce everything abroad," said Tsuyoshi Mochimaru, auto analyst with Deutsche Securities in Tokyo. "The idea is that rethinking quality begins in Japan."

Among the recent boosts in production here:

• Honda Motor Co. is planning its first plant opening in Japan in 30 years. The new car-assembly and engine plants will be running by 2010, creating 2,200 jobs.
• Toyota Motor Corp. is adding a new line at a plant in southwestern Japan to double production of engines for luxury models. The engine plant, which opened in 2005, marked Toyota's first plant opening in Japan in about 20 years; the new line, starting in 2008, will add 500 jobs.
• Nissan Motor Co. completed a second engine facility last year to make engines for luxury cars and other models. It's expanding another engine plant in Yokohama, southwest of Tokyo.

Thierry Viadieu, a Nissan executive who has overseen alliances, said the plant openings in Japan mark a new stage of growth from earlier decades when the main goal was simpler: Get out of Japan to produce cars where they're being sold.

These days, he said, multinational manufacturers need to be sophisticated in their production strategies, coordinating output among their far-flung plants, amid increasingly intense competition.

Nissan, for example, imports all of its Infiniti luxury models sold in North America from Japan — and for now, that make sense, said Nissan Chief Operating Officer Toshiyuki Shiga.

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