Japanese OEMs surpass global production record for third consecutive year
Year-to-year overseas production numbers increase while exports drop
Japanese OEMs set a new global production record for the third consecutive year and an overseas production record for the fifth consecutive year
Total global unit production volume by twelve Japanese OEMs in 2014 set a new record for the third year in a row, growing to 27.25 million units, posting a 3.3% year-over-year (y/y) increase. Overseas production volume by the Japanese OEMs broke all previous records, for the fifth year in a row, growing to 17.48 million units, which was a 4.3% y/y increase. The percentage of units built outside Japan to the OEMs' global production grew from 50.2% in 2008 to 64.1% in 2014. By region, the number of units produced in Asia in 2014 was 9.11 million (a mere 0.6% increase y/y), accounting for roughly 50% of all the units built outside Japan; the total number built in North America was 4.79 million units (a 5.4% y/y increase); and production volume in Central/South America (which includes Mexico) was 1.59 million units, resulting in a significant y/y increase of 23.9%.
Unit production volume in Japan grew 1.5% y/y, while exports fell 4.5% y/y
In 2014, the number of units built in Japan was 9.77 million. Even though this total surpassed the 9.63 million units in 2013 (which saw a 3.1% y/y decrease), it was nonetheless only a slight increase of 1.5%. Unit sales in Japan in full-year 2014 increased 3.5% y/y. Even though January-March 2014 sales rose tremendously, growing 20.7% y/y due to last minute demand before the consumption tax was increased in April, sales for the rest of the year (April-December) actually decreased 3.4% y/y.
Exports in 2014 totaled 4.47 million units, which was a 4.5% decrease y/y due to expansion of OEMs' production outside Japan, in spite of the uninterrupted weak yen. This was the second consecutive year in which exports fell.
Some production to be transferred back to Japan, with efforts being made to increase exports
Japanese OEMs have continued to expand their production volumes outside Japan as a means to minimize the negative impact of the strong yen. As a result, exports from Japan have been falling, and production volumes in Japan over the mid-term have not been increasing either. Now, however, the OEMs are placing importance on maintaining a certain level of production in Japan. Due to the uninterrupted weak yen, the OEMs are making plans to slightly increase their production volumes in Japan as well as export more vehicles
The next-generation Camry, which will be exported to North America, will be built by Toyota Motor Corporation at its Tsutsumi Plant. Nissan Motor Co., Ltd. has plans to return some of the production of the Rogue, which it transferred to the U.S. in 2013, back to Japan. Beginning in the second half of 2015, Honda Motor Co., Ltd. plans to start migrating some of the production of the U.S. version Fit, from its plant in Mexico to its Yorii Plant.
Production, sales in Japan and export from Japan by 12 Japanese OEMs
|Sales in Japan||5,082,235||4,609,256||4,956,136||4,210,219||5,369,720||5,375,513||5,562,888||103.5%|
|Exports from Japan||6,727,091||3,616,168||4,841,460||4,464,413||4,803,591||4,674,633||4,465,635||95.5%|
Source: Japan Automobile Manufacturers Association (JAMA)
2015 Japanese Market (Part 1): Outlook and vehicle tax revision (Feb. 2015)
2015 Japanese Market (Part 2): Suzuki and Honda expand market share (Feb. 2015)
2014 overseas production volumes increase in North and Latin America
Twelve Japanese OEMs built 17.48 million units outside Japan in 2014, which was a 4.3% y/y increase. By region, 9.11 million units were built in Asia, which accounted for 50% of the units built outside Japan. However, the y/y increase in production volume in Asia was a miniscule 0.6%. The regions posting higher y/y production increases were Europe, where the market is improving (1.65 million units/7.6% increase); North America, especially production for the strong U.S. market (4.79 units/5.4% increase); and Central/South America (which includes Mexico) that posted a tremendous 23.9% increase.
In terms of 2014 global unit production, which includes units built in Japan, out of every three units built by Japanese OEMs worldwide, it can be said that one unit was built in Japan, one unit was built in Asia, and one unit was built in a region other than Japan and Asia. North America and Central/South America, in which Mexico is included, is the largest vehicle-production region, following Japan and Asia.
Japanese 12 OEMs' overseas production by region (by JAMA for Japanese brand vehicles)
Japan's production of non-mini vehicles decrease while mini-vehicles increase
2014 production in Japan by the 12 Japanese OEMs totaled 9.77 million units, a slight 1.5% y/y increase. This was the sixth consecutive year (starting from 2009) in which production in Japan was below 10 million.
The 2014 production in Japan shows that 7.48 million non-mini vehicle units were built and 2.29 mini vehicles were built. While production of non-mini vehicles fell for the second consecutive year, production of mini vehicles increased for the third consecutive year. This trend has been continuing over the mid-term. The production of non-mini vehicles in 2014 was 2.22 million units fewer (a 22.9% decrease) than the actual number built in 2008, while production volume of mini vehicles in 2014 was 420,000 more than the actual number built in 2008 (a 22.6% increase). (While 2014 non-mini car sales in Japan remained almost flat at a miniscule 0.8% y/y increase, mini car sales increased 7.6% y/y. The percentage of mini cars to total sales grew from 39.3% in 2013 to 40.9% in 2014.)
Three OEMs reported y/y production decreases in Japan in 2014: Toyota (2.7% decrease/ 90,000 fewer units), Nissan (8.7% decrease/ 84,000 fewer units), and Mazda Motor Corporation (3.3% decrease/ 32,000 fewer units). However, outside of Japan, these three OEMs increased their production levels, with Toyota building 200,000 units more, Nissan building 230,000 units more, and Mazda building 97,000 units more. (Mazda built 102,000 units at its new plant in Mexico.)
Japanese 12 OEMs' production in Japan
|Fuji Heavy Industries (Subaru)||524,916||408,399||491,932||418,545||568,537||639,756||695,790||108.8%|
|8 OEM total||11,038,892||7,672,434||9,217,316||7,978,541||9,437,935||9,110,641||9,218,375||101.2%|
|12 OEM total||11,573,165||7,933,512||9,627,407||8,396,520||9,940,962||9,628,802||9,773,515||101.5%|
Production of non-mini vehicles and mini vehicles in Japan
2014 exports decrease 4.5% to 4.47 million units, in spite of weak yen
In spite of the yen's prolonged decline against U.S. dollars, the number of units exported from Japan by the 12 Japanese OEMs decreased y/y, from 4.67 million units in 2013 to 4.47 million in 2014. For the entire year, 209,000 fewer units were exported y/y, resulting in a 4.5% y/y decrease. The year 2014 became the second consecutive year in which exports decreased. When compared to the peak year of 2008, when 6.73 million units were exported, 2.26 million fewer units were exported in 2014.
Among 8 OEMs which produce passenger cars, three companies reported y/y increases in exports, and they are Fuji Heavy Industries (Subaru), Mitsubishi Motors Corporation, and Daihatsu Motor Co., Ltd., while another five reported decreases. One in particular is Honda, which has built a solid production framework worldwide. Honda launched commercial operations in spring 2014 at a new plant in Mexico. It exported 210,000 units in 2012, 130,000 in 2013, and only 30,000 units in 2014.
North America, while still the largest export market for the 12 OEMs in 2014 and to where they exported 1.66 million units during the year, saw a significant drop in exports y/y, by 225,000 units. In 2014 Nissan produced 155,000 more vehicles in the U.S. and 125,000 more vehicles in Mexico than the results in 2013. Honda and Mazda also launched production from spring 2014 at new plants in Mexico, for which the U.S. is a major market.
Export volume by Japanese OEM
|8 OEM total||6,349,095||3,442,782||4,548,156||4,178,079||4,460,405||4,336,555||4,122,495||95.1%|
|12 OEM total||6,727,091||3,616,168||4,841,460||4,464,413||4,803,591||4,674,633||4,465,635||95.5%|
Japanese OEMs' exports by region (12 OEM total)
Source: JAMA Note: "Total" includes export to other regions.
OEMs transferring some production back to Japan
When the valuation of the yen was high, Japanese OEMs increased their local production volumes outside Japan, in order to minimize the negative impact that the high yen was having on their business performance. As a result, the ratio that exports accounted for, from among total 2014 production volume in Japan, was to 44.7%, which is a decrease from the 57.5% that exports accounted for in 2008.
However, due to the current weak yen, the cost advantages of building vehicles in Japan has improved, so that OEMs are now planning to transfer some of their overseas production back to Japan and maintain their Japanese domestic production levels. While the OEMs haven't abandoned their policy of "building vehicles either locally or close by where they are sold," they are adjusting their regions of production according to demand and currency fluctuations. However, the OEMs are claiming that their objective is to improve productivity at their plants in Japan rather than boosting their production capacities.
Three OEMs' plans for returning some overseas production to Japan
|Toyota||Toyota discontinued exporting its Camry to North America from 2011. However, it now plans to discontinue outsourcing production of the Camry to Subaru of Indiana Automotive (SIA) at the end of 2016 and cease building the Camry in Australia at the end of 2017. Based on this decision, the company plans to start building its redesigned Camry, which will launch in 2017, at its Tsutsumi Plant and export the vehicle to North America, etc.|
|Toyota plans to build 10% of the Lexus RX models designed for sale in North America, and which it currently builds in Canada, at its Miyata Plant in Kyushu from the fall of 2015. This amounts to 10,000 units annually.|
|Nissan||Nissan transferred production of the U.S. version of the Rogue, which it had been building at its Kyushu Plant, to its Smyrna Plant in the U.S. from October 2013. In addition, it started building the Murano at its Canton Plant from November 2014. (Total annual production of both models is 200,000.) The company built 166,000 units of the Rogue at the Smyrna Plant. However, Nissan now is planning to re-launch some of the production of the U.S. version of the Rogue at its Kyushu Plant, in the range of 100,000 units a year.|
|Nissan's 2014 unit production in Japan decreased to 880,000. It now plans to maintain its level of production at around 1 million units annually. It is predicting that 2015 production will increase slightly, and that 2017 unit production will be around 1.1 million.|
|Honda||Honda, following the production launch of the Fit at its plant in Mexico, started building its second model at the plant, the HR-V (known as the Vezel in Japan). Honda now plans to transfer some production of the U.S. version Fit to its Yorii Plant in Saitama, in the range of 30,000 units annually. Its plan is to begin building and exporting them from the second half of 2015. In addition, it also plans to build the European version Jazz at the Yorii Plant, in the range of 20,000 units a year, for export.|
|Honda plans to transfer production of the U.S. version Accord Hybrid to its Sayama Plant. In 2014, the company built 14,000 units of the U.S. version Accord in the U.S.A. Honda is planning to increase the percentage of units it builds in and exports from Japan, which had dropped to just 3% in 2014, to between 10 and 20%.|
Sources: article from the May 3, 2015 Nikkei Shimbun; and articles from the April 11, April 30, and May 1, 2015 Nikkan Jidosha Shimbun
Reference: Japanese OEMs' production by region
|Fuji Heavy Industries (Subaru)||Overseas production||91,581||82,953||158,022||161,716||184,783||169,163||193,022|
|8 OEM total||Overseas production||11,335,229||9,909,194||12,949,467||12,905,439||15,244,164||16,235,495||16,992,552|
Source: Japanese OEMs' press releases
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