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April 9th, 2013 
JAPANESE monetary policy is to blame for Holden’s problems in Australia, Holden boss Mike Devereux says.
A day after announcing 500 job cuts across its Adelaide and Melbourne plants, Mr Devereux said his company is being forced to deal with a rapidly-falling Japanese yen , led by Japanese government policy.
“The problem we’re dealing with is that since October the yen has depreciated about 25 per cent,” Mr Devereux told ABC radio in Melbourne on Tuesday.
“And that means a car that was $20,000 five months ago costs around $15,000 to bring into the country, so there’s a lot of price competition.”
He said the small car segment, in which Holden produces the Cruze, was being most affected by the policy and by statements from Japanese Prime Minister Shinzo Abe.
“That’s pretty much where we’re getting hurt the most by – what the Bank of Japan is doing and frankly, what Prime Minister Abe has said in response to calls to Japanese car makers to weaken their currency.”
He said Japanese car makers had been “quite forthright” in saying that if the yen did not reach a certain zone, they would have to move their production offshore.
“Government assistance comes in many forms,” Mr Devereux said.
“In Japan’s case they will viciously protect their auto industry and they will continue to do that.”
Since taking office late last year Mr Abe has pursued an expansionary monetary policy through the Bank of Japan to stimulate the nation’s deflationary economy.
Mr Devereux said the effect of Japan being able to export its cars more cheaply was hurting Holden.
“We’d love to be selling more Cruzes – we think it’s a fantastic car – but we can’t chase the price down to counteract what the Bank of Japan is doing.”
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