(FORTUNE Magazine) – Bruised by the strong yen and a recession at home, the Japanese have made a valiant effort to boost their car sales in the U.S. this year -- valiant but expensive. While sales are up 5.8%, Japanese automakers could lose $2.5 billion in North America, up from $1.5 billion in 1993. You won't find those numbers in any annual reports, and they run counter to public company statements. They are the product of a detailed financial analysis by industry consultant Jay Woodworth, a former banker and U.S. Treasury official. Woodworth says the Japanese have been losing money in North America since 1987. The eight major Japanese carmakers have been slow to move parts manufacturing to key markets abroad. That means they spend a fortune using expensive made-in-Japan parts on cars assembled in the U.S. And the Japanese offer a poor product mix, with few of the popular, high-profit sport- utility vehicles that buoy American manufacturers. The Japanese are also having a hard time in their home market. Woodworth thinks that this year, like last, five automakers will record worldwide losses on car sales. He adds that weak finances have made Honda "seriously troubled" and Mazda "effectively bankrupt." Nissan is also losing big money on cars. Still, the Japanese are far from crippled. Says Woodworth: "They are coming back and will try to eat the Big Three's lunch." Sales in Japan have started to rebound after a four-year decline. And the Japanese maintain a giant productivity advantage. Woodworth says Toyota makes nearly 80 cars annually per employee, vs. under 20 for GM. Europeans Renault and Mercedes-Benz do even worse. (For more on the Europeans, see Autos.) Toyota has the financial strength and strong management to gain market share. But even mighty Toyota can't stymie the strong yen. Woodworth believes it's likely that high costs will force the company to manufacture its flagship Lexus LS400 in the U.S. before long.

CHART: NOT AVAILABLE CREDIT: FORTUNE CHART/SOURCE: WOODWORTH HOLDINGS CAPTION: JAPANESE AUTOMAKERS LOSE A BUNDLE IN NORTH AMERICA