"Endaka," or the continuing escalation in the value of the Yen against the dollar has curtailed Japanese exports to the point that the major Japanese automakers are beginning to feel the squeeze on profits. What has been called "endaka" can be traced to the 1985 Plaza Accord when the G7 countries agreed that the dollar was overvalued and that other currencies should be strengthened against the dollar, with a target of 100 to 100 Yen equaling one dollar. The strategy that the Japanese automakers must adopt is to band together and present a united front, while it determines just exactly how important its current markets are. This is essential because the industry is being pressured by too many external forces. During this period of "banding together" the big four could enter into strategic discussions that would focus on their future.
Potential Strategies for the Big Four
Strategy 1: Do nothing: This strategy could serve to disarm and confuse both the Japanese government and the world trade partners, many of whom are expecting a renewal of cost-cutting and down-sizing that had followed previous Yen discrepancies.
Strategy 2: Offshore Expansion Westward -- It is apparent that the government is not supporting the big four to the level of accommodation that they need. If the big four went against the government and moved even more of their production efforts offshore, and, therefore in a different currency -- Francs, Euros or Pounds for instance -- then the decrease in the value of the Yen would not present such a conflict.
Strategy 3: Offshore Expansion Eastward -- The developing ASEAN nations have an abundance of labor and materiel for establishment of factories that could produce cars for the Big Four.
Strategy 4: Cut Back on Operations -- Though not economically sound, this strategy would be effective in forcing the Japanese government to come up with a consistent and p
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