Japanese OEMs aim for third consecutive year of record sales in FY 2014

Sales in North America and Asia key to reach target of 26.15 million units

2014/05/26

Summary

Seven OEM's operating profit marginsFY 2014 Outlook
 With correction of the yen appreciation, recovering Japanese economy, improved U.S. market, and increased sales in Asia, the ten Japanese automakers achieved the record high combined sales and profits in the fiscal year ended in March 2014 (FY 2013). They also made the largest investment in history in facilities and R&D, aiming for future growth. The automakers plan to mark record highs in sales and profits again in FY 2014. Room to increase revenues and profits, however, will be smaller due to downturn after the consumption tax hike in Japan, increases in capital expenditure and R&D costs, and weakening currencies in emerging countries.

Global sales plan: 26.5 million units
 The ten Japanese OEMs plan to renew the record sales volume for the third consecutive year with a total of 26.15 million units in FY 2014, up 5.4% year-over-year (y/y). In North America, the seven Japanese passenger car OEMs plan to sell 7.27 million units in total, up 5.4% y/y, which exceeds the level before the economic crisis. In "Asia & others", they plan to increase the combined sales by 8.8% to 10.98 million units. Among them, five automakers aim to break their current records: Nissan, Honda, Suzuki, Fuji Heavy Industries (FHI: maker of Subaru automobiles), and Hino.

Revenue plan: JPY 62 trillion
 As a total of the ten OEMs, the target for the FY 2014 consolidated revenues is JPY 62 trillion, up 3.5% y/y, which is close to the highest revenue of JPY 62.3 trillion recorded in 2007. On a company basis, Nissan, Honda, and FHI aim at renewing their records.

Operating profit and operating margin
 Each Japanese OEM plans to increase their profits in FY 2014. The total operating profit of the ten OEMs is projected to increase by 2.2% y/y to JPY 4.63 trillion. Toyota, Suzuki, Mazda, Mitsubishi Motors, and FHI intend to hit record high operating profits.
 In terms of operating profit margins, Toyota, Mazda, and FHI increased their rates significantly in FY 2013. In particular, FHI posted a large margin of 13.6%. Toyota surpassed the level prior to the economic crisis to mark 8.9% in FY 2013. In contrast, Nissan and Honda ended in profit margins lower than the pre-crisis level still in FY 2013. Among the seven passenger car OEMs, Nissan showed the lowest margin, with a lower profitability due to changes in its accounting method in FY 2013.

Related Reports:  FY 2014 Japanese sales outlook exceeds 5.1 million units (Apr. 2014)
Japanese OEMs produce record high 26.4 million vehicles globally in 2013 (May 2014)

Japanese OEMs' FY 2014 plan (bold figures represent record highs)

Automobile sales volume
(in 1,000 units)
Consolidated revenue
(in 100 millions JPY)
Operating profit
(in 100 millions JPY)
Exchange rate of yen to dollar
FY2013
results
FY2014
plan
(Reference)
FY2007
results
FY2013
results
FY2014
plan
(Reference)
FY2007
results
FY2013
results
FY2014
plan
(Reference)
FY2007
results
FY2014
plan
(Reference)
FY2007
results
Toyota 9,116 9,100 8,913 256,919 257,000 262,892 22,921 23,000 22,704 100 114
Nissan
(note 2)
5,188 5,650 3,698 104,825 107,900 108,242 4,984 5,350 7,908 100.0 114.4
Honda 4,323 4,830 3,925 118,424 127,500 120,028 7,502 7,600 9,531 100 114
Suzuki 2,711 2,756 2,406 29,383 30,000 35,024 1,877 1,880 1,494 100 114
Mazda 1,115 1,200 1,240 26,922 29,000 34,758 1,821 2,100 1,621 100 114
Mitsubishi 1,047 1,182 1,337 20,934 23,000 26,821 1,234 1,350 1,086 100 115
Daihatsu 1,109 1,095 945 19,132 18,300 17,026 1,467 1,400 652 100 114
FHI 825 916 597 24,081 27,200 15,723 3,265 3,400 457 100 116
Isuzu 495 517 509 17,609 18,400 19,248 1,742 1,650 1,096 100 115
Hino 166 177 112 16,996 16,000 13,686 1,122 900 459 100 114
Total 24,820 26,151 22,625 599,097 620,000 622,736 45,346 46,330 45,897 100.0 114.4
Source: OEMs' financial flash reports and earnings announcements
(Note) 1. "Total" does not include the consolidated data of Daihatsu and Hino to avoid overlaps with Toyota.
2. Nissan changed its accounting method in FY 2013. The FY 2007 sales volume shows the consolidated volume, but those for FY 2013 and FY 2014 show the global volumes. If revenues are calculated using the same method as in FY 2007, the FY 2013 results are JPY 11.43 trillion and the FY 2014 plan is JPY 11.95 trillion, both of which exceed the FY 2007 level.