7 Out of 8 Japanese Car Makers See Profits Hit Hard by Earthquake and Strong Yen

Japan’s major car manufacturers have been releasing their figures for the period from April to June 2011, and it does not make happy reading:

Toyota, Mazda and Mitsubishi ended up with operating losses, and the other car makers also saw profits tumble. Interestingly, Mitsubishi’s operating loss occurred despite posting higher sales revenues for this period.

The clear winner in this difficult period has been Nissan who, despite sales revenue only 2/3 of leader Toyota, totally eclipsed the erstwhile automotive leader in the profit stakes. Nissan ended the period with 85 billion Yen in profit (20.3% down on the same period last year), far ahead of next-placed Honda, who managed 31.7 billion Yen (down 88.3% on the previous year.) Toyota, by comparison had final profits of just 1.1 billion Yen, down 99.4% on last year’s result.

Nissan may not have met their 8% profit level target yet, but the 4.1% they achieved this last quarter is not at all bad considering the poor prevailing conditions. It is interesting that Nissan has embraced offshore production for its home market to a greater extent than its rivals. As a result, it has been able to take advantage of the very strong Yen, rather than ending up on the other side of the equation and suffering from it.

Offshore production may also have cushioned Nissan from the supply chain disruption of the March 11th earthquake disaster, which has negatively impacted all of these companies.

Source: Mainichi Shinbun (Japanese-language)