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Japanese OEMs: ten companies report operating profits in FY2009Total sales 18.8 million vehicles, while plan for FY2010 increase to 19.9 million

Index

Executive Summary

  The business results of Japanese OEMs (10 companies' account settlements except Mitsubishi Fuso and UD Trucks [former Nissan Diesel Motor]) for the FY2009 (ending March 2010) ended in a consolidated sales volume of 18.756 million (down 4.4%). Yet, among them, three OEMs - Nissan, Suzuki, and Fuji Heavy Industries - boosted their sales. The 10 companies' consolidated sales amount was 43.6 trillion JPY, down by 5.7 trillion JPY (or 11.6%). The FY2009 results were at a 70% level of that of FY2007. However, all companies posted operating profits through the reduction of overhead cost etc.

  The 10 makers' plan for FY2010 anticipates that the sales volume will increase to 19.949 million vehicles, up 6.4%, due mainly to increases in sales overseas. The sales amount is to grow by 2.6 trillion JPY (or up 5.9%) to 46.2 trillion JPY. All companies expect to register an operating profit, ordinary profit, and net profit.

Consolidated sales volume in FY2009 drops by 4.4% while plans for FY2010 anticipate an increase to 19.949 million, or up 6.4%

  The consolidated vehicle sales volume of 10 Japanese automobile manufacturers in FY2009 accounted for only 18.756 million, down 4.4% compared to FY2008. However, while all companies showed decreased sales volume in FY2008 from FY2007, three companies - Nissan, Suzuki, and Fuji Heavy Industries - increased their sales in FY2009. This was due to an increase in vehicles sales by Suzuki and Fuji Heavy Industries mainly overseas, with Nissan decreasing slightly.

  In Japan, due partly to the government's measures to encourage consumers to buy eco-friendly vehicles, the 10 companies boosted their consolidated vehicle sales to 4.632 million, up 6.2%. They decreased their consolidated overseas sales to 14.124 million, down 11.7%.

  In FY2010, the 10 companies expect their consolidated sales volume to grow to 19.949 million, up 6.4%. In Japan, as the government's incentive program will end, they expect sales to shrink by approximately 300,000, but they estimate their overseas sales will increase by 1.485 million. However, this is still 10% lower than their consolidated sales of 22.624 million in FY2007 before the financial crisis.

■FY2010 sales in Asia and other regions are expected to surpass the level prior to the financial crisis

  According to six manufacturers that announced their sales plan by region, they expect their sales to grow in North America, Europe, Asia and other regions except Japan, which contributes to the increase in their sales planned for FY2010. They forecast the FY2010 sales in Europe will remain at approximately 70% of the level in FY2007 before the financial crisis. The financial crisis is expected to continue to affect sales in developed countries. However, in Asia and other regions, the six OEMs expect sales volume to grow by more than 10% compared to those in FY2007.

Consolidated sales amount in FY2009 drops to 43.6 trillion JPY with decreased sales overseas

  The consolidated sales amount of 10 Japanese OEMs in FY2009 was 43.6 trillion JPY, decreasing by 5.7 trillion JPY (or 11.6%) compared to FY2008, and was approximately at the 70% level of that in FY2007. In Japan, Toyota, Honda, and Fuji Heavy Industries boosted their sales due to the government's measures to encourage consumers to buy eco-friendly vehicles; the 10 companies' consolidated sales were 11.9 trillion JPY, remaining at the same level as FY2008. However, in the overseas markets, the companies (excluding Daihatsu) decreased their sales amount, total consolidated sales were down by 5.7 trillion JPY (or 15.3%) to 31.7 trillion JPY.

  In each company's plan for FY2010, sales are expected to grow with the exception of Daihatsu. The consolidated sales amount is estimated to increase by 2.6 trillion JPY (or 5.9%) to 46.2 trillion JPY.

In FY2009, all 10 companies register operating profit and in FY2010 also forecast ordinary profit and net profit

  In FY2009, all 10 companies registered operating profit and their consolidated profit was 964 billion JPY. They also expect to post an operating profit for FY2010, expecting a total of 1.3 trillion JPY (4.6 trillion JPY in FY2007).

  In FY2009, all companies except Hino posted ordinary profit, while all but Mazda, Fuji Heavy Industries, and Hino reported net profit. In FY2010, all manufacturers expect to achieve ordinary profit and net profit.

Reduction of overhead cost, and R&D cost increased profit by 2.2 trillion JPY in FY2009

  In FY2009, all 10 companies registered operating profit and their consolidated profit improved by 1.3 trillion JPY. Sales fluctuation and the FX fluctuation decreased the operating profit by 877.4 billion JPY and 847.9 billion JPY, respectively, whereas cost reduction and reduction of overhead cost and R&D cost increased it by 1.0 trillion JPY and 1.2 trillion JPY, respectively.

  In FY2010, the 10 OEMs expect that their consolidated operating profit improve by only 308.9 billion JPY. Although the increase in sales will boost the profit by 566.4 billion JPY, the profit from cost reduction will shrink to 245.0 billion JPY due to the rising price of materials and other factors such as an increase in investment cost and R & D cost are expected to reduce the profit.

10 OEMs plan to increase investment by 400 billion JPY and R & D by 150 billion JPY in FY2010

  Consolidated capital investment of 10 Japanese OEMs in FY2009 was 1.5 trillion JPY, decreasing by 1.3 trillion JPY from FY2008. R&D cost was cut by around 403.2 billion JPY to 1.9 trillion JPY.

  In FY2010, each maker will increase investment to a total of approximately 1.9 trillion JPY, which is approximately 1 trillion JPY lower that the level before the financial crisis. R&D costs are expected to increase by approximately 150 billion JPY to 2.1 trillion JPY.