FY2011 outlooks of Japanese OEMs and influence of Thailand flooding

Toyota and Honda drop their full-year forecasts

2011/11/29

Summary
Flooding in Thailand: Honda has difficulty resuming operations in FY2011 as its Thai plant is under water; Toyota, Nissan, Mazda, and Mitsubishi resumed operations in mid November
Consolidated sales volume: Except Toyota and Honda, eight Japanese OEMs revise their FY2011 forecasts upward to 11.401 million (up 5.6% year-on-year)
Revenues: Eight Japanese OEMs revise their FY2011 revenue outlooks downward to 21.8 trillion yen (up 2.4% year-on-year)
Profits: Eight Japanese OEMs revise their FY2011 operating profit outlooks upward to 924 billion yen (down 8.8% year-on-year) with the assumed exchange rate of 76.8 yen to the US dollar in the second half
Positive and negative effects on operating profits: Japanese OEMs plan to make up for losses from exchange fluctuation by increase in sales and reduction in expenses in FY2011
OEMs plan to increase capital investment slightly from the original plan to about 1.03 trillion yen (eight OEMs); R&D costs to decline by 28 billion yen to 891.5 billion yen

Summary

Domestic production of Japanese OEMs stayed at about 40% that of the previous year in March and April due to the Great East Japan Earthquake in March 2011. Then, the production gradually recovered almost to normal levels in summer. Each OEM planned to start boosting production in autumn. Due to the influence of flooding in Thailand, all local plants of Japanese OEMs that operate in Thailand, halted operations starting in October (some of them resumed operations in mid November). In addition, outside Thailand, the auto-parts supply network is disrupted, which is why Toyota and Honda have been reducing production at some of their plants.

Due to the influence of the flooding in Thailand, Toyota and Honda dropped their FY2011 business outlooks in the earnings announcements of the first half of FY2011. Compared to the forecasts in the earnings announcements of the first quarter FY2011, eight Japanese OEMs except Toyota and Honda revised their unit-sales outlooks upward by 5.6% year-on-year to 11.401 million units. They revised their revenue outlooks downward to 21.8 trillion yen (up 2.4% year-on-year), but their operating profit forecasts upward to 924 billion JPY (down 8.8% year-on-year)at an assumed exchange rate of 77.9 yen (up by about 2.5 yen) to the US dollar (the assumed exchange rate for the second half is 76.8 yen).

First half-year results of FY2011 of ten Japanese OEMs including Toyota and Honda are negatively affected by the Great East Japan Earthquake: the unit sales were 9.01 million (down 11.9％ year-on-year), revenues were 20.4 trillion JPY (down 13.2％ year-on-year), and operating profit was 492 billion JPY (down 60.6％ year-on-year).

Overviews of Japanese OEMs' FY2011 outlooks and the first half business results

	Four-wheeler sales volume (1,000 units)			Consolidated revenues (100 million yen)			Operating profit (100 million yen)			Yen to dollar (yen)
	FY2010 business results	FY2011		FY2010 business results	FY2011		FY2010 business results	FY2011		FY2011
	FY2010 business results	Full year outlook	First half results	FY2010 business results	Full year outlook	First half results	FY2010 business results	Full year outlook	First half results	Full year outlook	First half results
Toyota	7,308	-	3,026	189,937	-	80,159	4,682	-	(326)	-	80
Nissan	3,888	4,411	2,012	87,731	94,500	43,674	5,375	5,100	3,097	79.9	79.8
Honda	3,512	-	1,319	89,368	-	36,005	5,697	-	750	-	79
Suzuki	2,642	2,719	1,205	26,082	26,100	12,262	1,069	1,100	647	77	80
Mazda	1,100	1,060	470	23,257	21,600	9,592	238	0	(216)	78	80
Mitsubishi	1,098	1,094	530	18,285	18,200	9,075	403	500	342	78	80
Daihatsu	893	922	404	15,594	15,700	7,113	1,034	950	420	76	80
FHI	657	645	266	15,806	14,800	6,550	841	300	188	78	80
Isuzu	408	422	182	14,155	14,300	6,581	882	940	438	78	81
Hino	108	128	56	12,427	13,200	5,757	289	350	149	78	80
Ten OEMs' Total	20,613		9,010	464,621		203,898	19,187		4,920	77.9	80.0

Source: OEMs' financial flash reports and earnings announcement documents
(Note) 1.	In the earnings announcements of the first half of FY2011, Toyota and Honda changed their full-year FY2011 forecasts to "undecided," saying that they are unable to reasonably estimate the influence of the slowdown of production due to the flooding in Thailand.
2.	The total of the yen-dollar exchange rates shows the average of the ten OEMs.

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