HONG KONG, Aug 5 (Reuters Breakingviews) - Japan’s largest auto marques are showing their strength. Toyota Motor (7203.T) and Honda Motor (7267.T) beat estimates read more on Wednesday; Honda lifted its full-year profit guidance by 18%. Even long-battered Nissan Motor (7201.T)rode the wave, with global sales up 63% in the three months to the end of June, helping it post an unexpected profit and hike its earnings outlook.
Commodity prices and a global chip shortage are issues, but the trio is managing them better than U.S. rivals like General Motors (GM.N) read more , whose stock fell almost 8% after reporting earnings on Wednesday.
That makes the liquidity buffers the Japanese carmakers accumulated during the pandemic stand out. Toyota had 5 trillion yen ($46 billion) in cash and equivalents at the end of the quarter, down from 7 trillion yen a year earlier but well above its pre-Covid-19 average and double GM’s stash. Honda’s stack looks high, too. With Tokyo pushing Japan Inc. to stop hoarding and hike wages, such balance sheet conservatism is getting harder to defend. (By Pete Sweeney)
On Twitter http://twitter.com/breakingviews
Capital Calls - More concise insights on global finance:
GM finds inflation takes more than it gives read more
New York Times beats Trump slump read more
Frontier tech investors are on their own read more
Hugo Boss needs stronger legs to win fashion race read more
SoftBank’s pharma AI bet has long odds read more
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.