TOKYO Feb 8 Nissan Motor Co bucked the
optimistic trend among Japanese carmakers reporting quarterly
earnings, leaving its annual profit forecast unchanged as
sluggish sales weighed on its bottom line while others got a
boost from a weakening yen.
The cheaper yen is improving the competitiveness of cars
made by Nissan, Toyota Motor Corp, Honda Motor Co Ltd
and other Japanese brands when exported to key markets
such as the United States, and adding to pressure on their South
Shares in South Korea's biggest carmaker Hyundai Motor Co
have fallen around 20 percent since the start of
October; by contrast, Toyota shares are up more than 50 percent.
The revivifying effect of the falling yen is being felt
throughout Japan's auto industry supply chain. Last week the
world's second-biggest auto parts supplier Denso Corp -
part-owned by Toyota - raised its annual profit forecast by 6.7
percent, saying the currency move would help it and its
This week a South Korean finance ministry official warned of
possible market intervention as the yen's slump against the won
- by more than 22 percent last year and another 5.6 percent so
far this year - was cutting into South Korea's export
Adding to the discomfort for the South Korean industry, in
January Toyota's Camry model won the "Korea Car of the Year
Award", industry press reported, bagging a prize usually handed
to domestically made vehicles.
DRAMATIC IMPACT AT MAZDA
Among Japan's carmakers, currency moves are expected to have
the most dramatic impact at Japan's fifth-ranked firm Mazda
Motor Corp, which raised its operating profit outlook
for the year ending in March by 80 percent.
Fuji Heavy Industries Ltd, which makes Subaru cars,
lifted its operating profit outlook by 30 percent, Toyota by 10
percent, and Suzuki Motor Corp and Daihatsu Motor Corp
by 8 percent apiece.
Nissan left its annual net profit forecast unchanged at 320
billion yen ($3.43 billion) and reported a 35 percent
year-on-year drop in third quarter net profit, citing weak
demand in Europe, China and the United States.
"Everyone faces the same yen moves, but for Nissan, there
are regions in which it is selling below its target," said J.P.
Morgan analyst Kohei Takahashi, referring to Japan and the
"It has been running with aggressive targets for all
markets. For the past year or two, that worked out. But now the
company is entering a cycle in which it is underperforming its
target," he said.
Nissan sold 4.94 million vehicles in calendar year 2012
globally, up 5.8 percent from 2011, but sales in China, its
biggest market, fell 31.3 percent on average in October-December
from a year ago after anti-Japan protests broke out in September
in response to a dispute between the countries over the
ownership of islands.
"Looking forward, we have important vehicle launches,"
Nissan Chief Executive Carlos Ghosn said in a statement. "We
anticipate further yen correction. We have made swift
organisational changes to help stimulate our business
performance. And we remain confident that we will meet our
In the United States, although its redesigned Altima sedan
is selling well, Nissan is struggling to shift its older models
such as the Rogue crossover SUV. The firm is expected to launch
a redesigned Rogue, and in China a new-look Teana sedan, later
Shares in Nissan have risen about 45 percent since
mid-November on hopes the weakening yen will boost its bottom
line, far ahead of the 30 percent rise in Tokyo's benchmark
Nikkei index over the same period.
Toyota, Honda and Mazda have also posted big gains.
The Japanese currency has lost around 20 percent of its
value versus the dollar since October, which helps exporters
because they can convert profits made overseas back into yen at
a more favourable rate.
(Editing by Daniel Magnowski)