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Could Exchange Rate Issues Drive Some Manufacturers Out of U.S.?

For now, it looks like many of the European and Japanese manufacturers are absorbing significant losses on sales in the United States due to unfavorable currency fluctuations versus the dollar. Honda builds its Gold Wing in the United States, but most products sold here by these manufacturers are built overseas and imported in exchange for a relatively weak currency these days, the United States dollar.

In the automobile business, many foreign manufacturers hedge currency fluctuations by establishing manufacturing facilities in the United States. We may see more of this in the motorcycle industry, but this is a difficult option for smaller manufacturers, who could ultimately be driven out of the U.S. market unless the dollar recovers significantly.

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