are giving more warning signals of the way forward than their American counterparts. This is wrong: The Japanese players can actually handle better.
Nissan said it expects an operating profit of 250 billion yen, or about $1.9 billion, for the year through March 2023 – in line with what it achieved in the last financial year. . According to FactSet, analysts are now forecasting an average of 316 billion yen, so they could fall. Thursday’s announcement came after Tokyo closed, but shares in the French carmaker
the company owns 43% of Nissan, down about 7% in European trading.
Toyota launches with similar discount guide Fourth, trigger a sell-off of its stock. Both companies spoke at length about the difficulties of raw materials amid rising commodity prices. This is also a topic about US automaker earnings, but with differences:
implied in their instructions that they could offset the pain by increasing the price of the car. Strong price increase It doesn’t seem to make forecasts for Toyota and Nissan to the same extent.
The most likely explanation for this difference is the more cautious Japanese companies, both in making forecasts and charging more for their products. After some analysts seriously downgraded their numbers to match the outlooks of companies, investors may want to take a different look at them.
Mio Kato, who writes about Japanese automakers on research platform Smartkarma, says there are still echos of the 2004-2006 period, when Japanese rivals proved to be much better than their rivals. American partner.
One is the weak yen, which has fallen in recent weeks to 20-year low against the dollar because the Federal Reserve raised expectations for a much faster rate hike than
This gives Japanese industry an advantage: Automakers source parts from home even when they assemble them in the US and Europe. They will be able to raise prices more modestly than their peers while keeping their margins.
The other is high gas prices, in the early years of the millennium, pushed consumers toward smaller, more fuel-efficient models like the Toyota Prius. Trends now favor larger vehicles, especially in the US This may seem irreversible, but petrol hybrids and smaller sport utility vehicles – both specialties of Japan Inc. – may become more common as the current shortage of supply eases. Cheaper car models in general are likely to outsell as interest rates rise, according to another echo of 2004.
Toyota and Nissan both have their challenges, but investors shouldn’t read too much into the lows they’ve set for their new financial year. If the situation turns out to be as bad as their forecast, it could be worse for Detroit.
Write letter for Stephen Wilmot at [email protected]
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