Japanese OEM's financial outlook: Expectation of declining profits

Amidst concerns about profits, largest capital and R&D investments in history planned for FY 2017

2017/06/23

Summary

9 OEMs' Consolidated sales

(Translation note: the Japanese fiscal year runs from April to March of the following calendar year. Because of this, some Japanese OEMs report their fiscal years one year ahead of what is the current fiscal year. In this report, all fiscal years are written so that they roughly correspond to the calendar year. For example, fiscal year 2016 indicates the period from April 2016 to March 2017.)

  The financial results of nine Japanese OEMs (excluding Mitsubishi Fuso and UD Trucks, which do not release statements) in FY 2016 saw decreases in both sales and profits for the first time since FY 2011 (in FY 2016, sales decreased year-over-year (y/y) by 3.4% to JPY 66.8861 trillion, and operating income decreased 16.8% to JPY 4.5319 trillion). The impact of exchange rate fluctuations has caused operating profits to fall short of JPY 2 trillion, and the North American market has stopped expanding, leading to intensified price competition and a decrease in profits that has also affected the OEMs.

  The FY 2017 earnings forecast projects a 1.2% increase in sales at JPY 67.66 trillion, but operating income is expected to decline 11.5% to JPY 4.12 trillion for the second consecutive term.

  Although profits will stagnate, the OEMs have not restrained themselves from investing for the future, and in FY 2017, they plan to make capital investments of JPY 3.2 trillion (6.9% increase, exceeding JPY 3 trillion for the first time), and research and development expenditures of 2.95 trillion (6.8% increase). President Toyoda of Toyota commented, "The present automobile industry is being asked to make a paradigm shift, for which, as I see it, especially AI, autonomous driving, robotics, connected systems and other new domains will hold important keys. I want to continue planting seeds looking to 10 or even 20 years into the future." Additionally, Japanese OEMs plan to actively invest in electrification technology.

Nine Japanese OEMs' Consolidated Sales and Profit

(in billions of JPY)

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Plan
Sales 46,462 45,211 50,847 59,910 64,925 69,208 66,886 67,660
Operating profit 1,919 1,418 2,822 4,535 5,123 5,448 4,532 4,012
Operating profit margin 4.1% 3.1% 5.5% 7.6% 7.9% 7.9% 6.8% 5.9%
Net income 1,364 936 2,039 3,460 3,893 4,056 3,543 3,262

Year-over-year comparison

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Plan
Sales 6.5% -2.7% 12.5% 17.8% 8.4% 6.6% -3.4% 1.2%
Operating profit 99.0% -26.1% 98.9% 60.7% 13.0% 6.3% -16.8% -11.5%
Net income 152.9% -31.4% 117.8% 69.7% 12.5% 4.2% -12.7% -7.9%
Source: Nine Japanese OEMs' Financial Results

Related report:
Japanese OEMs' Financial Outlook for FY 2016: Downturn in sales and profit due to foreign exchange (May 2016)



Japanese OEMs: Decrease in operating profits for second consecutive term in FY 2016-2017

  The settlement of accounts for the nine Japanese OEMs in FY 2016 saw a 3.4% decrease in sales (JPY 66.8861 trillion), and a 16.8% decrease in operating profits (JPY 4.5319 trillion). OEMs with a high export ratio such as Mazda (44.6% decrease) and Subaru (27.4% decrease) experienced a large decrease in profits, while Toyota also experienced a 30.1% decline. Honda's 67.0% increase in profits was due to a major cut in quality assurance costs, while a rise for Suzuki was attributed to its healthy Indian operations.

  In FY 2017, the sales of the nine OEMs will see a marginal increase of 1.2%, but operating income is expected to decrease by 11.5%. Toyota expects a 19.8% decrease in operating profits based on an assumed exchange rate of USD 1=JPY 105.

  In FY 2014-2015, Japanese OEMs realized a 7.9% operating margin, but in FY 2016, performance dropped to 6.8%, with this figure further declining to 5.9% in the plans for FY 2017. The three major OEMs (Toyota, Nissan and Honda), Suzuki, and Subaru all expect to see a drop in operating margin. Although not achieving its 17.5% operating margin in FY 2015, Subaru alone expects to exceed 10%. Its performance in FY 2016 was 12.4%, and the company expects a 12.0% operating margin in FY 2017.

Operating income and
Operating margin 7 OEMs' Operating margin

OEM business plan for FY 2017

(in billions of JPY)

Sales Operating profit
FY2015 FY2016 Growth ratio FY2017 Forecast Growth ratio FY2015 FY2016 Growth ratio FY2017 Forecast Growth ratio
Toyota 28,403 27,597 -2.8% 27,500 -0.4% 2,854 1,994 -30.1% 1,600 -19.8%
Nissan 12,190 11,720 -3.9% 11,800 0.7% 793 742 -6.4% 685 -7.7%
Honda 14,601 13,999 -4.1% 14,200 1.4% 503 841 67.0% 705 -16.1%
Suzuki 3,181 3,170 -0.4% 3,400 7.3% 195 267 36.6% 240 -10.0%
Mazda 3,407 3,214 -5.6% 3,350 4.2% 227 126 -44.6% 150 19.3%
Mitsubishi 2,268 1,907 -15.9% 2,000 4.9% 138 5 -96.3% 70 13.7 times
Subaru 3,232 3,326 2.9% 3,420 2.8% 566 411 -27.4% 410 -0.2%
Isuzu 1,927 1,953 1.4% 1,990 1.9% 172 146 -14.7% 152 3.8%
Hino 1,746 1,684 -3.5% 1,720 2.2% 98 71 -27.6% 75 5.3%
Nine OEMs 69,208 66,886 -3.4% 67,660 1.2% 5,448 4,532 -16.8% 4,012 -11.5%
Source: Nine OEMs' Financial Results
(Note) Toyota's consolidated settlements of accounts include Daihatsu and Hino. Hino's figures are included in Toyota's consolidated settlements of accounts, and thus not added to the total of the nine OEMs.


Impact of exchange rate fluctuations in FY 2016 amounts to JPY 2 trillion, causes a decrease in profits; stagnation of the North American market also takes a toll

Effects of changes in exchange rates on
operating profit

  The reasons for the decrease in profitability can be attributed to the impact of exchange rate fluctuations as well as a deceleration in North American operations. In FY 2016, the yen appreciated against the dollar by JPY 12. The fluctuations in exchange rates resulted in a decrease of roughly JPY 2 trillion in operating profits. Efforts to reduce costs failed to make up for the loss, and the total operating profits of the nine OEMs decreased by JPY 916.3 billion. For Toyota, the impact of exchange rate fluctuations caused a decrease in operating profits of JPY 940 billion.

  In FY 2017, Japanese OEMs forecast an average of USD 1=JPY 105-110 and EUR 1=JPY 115-120. Toyota, Honda, and Mitsubishi Motors have maintained a relatively conservative outlook of USD 1=JPY 105. The nine OEMs are expecting exchange rates to cause a decrease in total operating profits of JPY 238.9 billion, a significant decrease from 2016.

Impact of foreign currency fluctuations on operating profit

(in billions of JPY)

FY2013 FY2014 FY2015 FY2016 FY2017
Forecast
Exchange rate forecast for FY2017 (JPY)
USD EUR
Toyota 900 280 160 (940) (110) 105 115
Nissan 248 69 (13) (282) (60) 108 118
Honda 289 79 (60) (283) (95) 105 -
Suzuki 54 22 (3) (79) 0 110 115
Mazda 113 17 (42) (103) 0 108 118
Mitsubishi 66 12 (17) (78) (5) 105 115
Subaru 170 104 108 (144) 21 110 120
Isuzu 25 8 8 (30) 10 110 -
Total 1,865 591 140 (1,938) (239) 108 117
Source: OEMs' Financial Results
(Note) Hino does not provide data about the effect from foreign exchange fluctuations.

Intensifying price competition in the North American Market impacts profits

  In 2016 the U.S. light vehicle market saw a y/y increase of 56,000 vehicles (0.3%), and achieved a new record high for the seventh consecutive year. However, the market has lost its momentum from 2013-2015, where there was a y/y increase of roughly 1 million vehicles. Furthermore, between January and April 2017, sales of light vehicles saw a y/y decrease of 2.4% to 5.462 million vehicles. The total number of Japanese vehicles remained at 2.105 million vehicles for a 0.7% decrease, with Toyota, the largest Japanese OEM, seeing a 5.9% decrease to 735,000 vehicles.

US Light Vehicle Sales

Jan.-Apr. 2016 Jan.-Apr. 2017 Y-o-Y change
Toyota 780,206 734,537 -5.9%
Nissan 524,065 538,889 2.8%
Mitsubishi 34,886 37,522 7.6%
Nissan - Mitsubishi 558,951 576,411 3.1%
Honda 506,532 503,679 -0.6%
Mazda 90,839 93,235 2.6%
Subaru 182,777 196,618 7.6%
Total of Japanese OEMs Light vehicle 2,119,305 2,104,480 -0.7%
Total US Light vehicle 5,594,702 5,461,882 -2.4%
Source: Automotive News


  As sales struggle to grow, price competition has intensified, and average incentives for all OEMs in the U.S. market have grown rapidly. For example, in October 2016, the incentive per vehicle was USD 3,104, a y/y increase of 14%, and 9.5% of the average transaction price of USD 32,529. In December, incentive grew 20% y/y to USD 3,673 (more than 10% of the transaction price). Nissan's sales expenses, such as its sales incentives in the U.S., increased by JPY 218.2 billion in FY 2016. All Japanese OEMs are attempting to control incentives to avoid getting caught in excessive sales competition.

  According to articles in The Nihon Keizai Shimbun (dated May 25, 2017) and Bloomberg (May 18), the total debt of US households at the end of March was roughly JPY 1,410 trillion, exceeding the highs of the Lehman financial crisis. In place of the housing loans, which posed a major issue at that time, student loans, auto loans, and card loan balances are increasing at a rapid pace. Of the debt of approximately USD 1 trillion in auto loans, 30% to 40% are believed to be sub-prime (loans to customers with low credit ratings).

  Furthermore, in the period January to March 2017, the delinquent loan ratio of auto loans exceeding over 90 days increased to 3.82%, achieving such high figures for the first time in four years. As a result, it has been reported that banks have begun restricting sub-prime loans.



Global sales of passenger vehicles steadily increasing

  The global vehicle sales of the seven passenger vehicle OEMs in FY 2016 increased 3.3% to 26.09 million vehicles, with all OEMs excluding Mitsubishi Motors enjoying growth. Sales have steadily increased in all regions of the world. Subaru grew its sales in North America by 91,000 vehicles (14.3%) and its total global vehicle sales by 108,000 (11.2%), exceeding 1 million global vehicle sales for the first time.

  In FY 2017, the seven OEMs expect to see overall growth of 2.0%. Suzuki aims for global sales of 3 million vehicles for the first time, and Mitsubishi Motors also plans to recover to the level of 1 million vehicle sales. Toyota is taking a cautious stance, and anticipates a marginal decrease in developed regions such as Japan, the U.S., and Europe, as well as in its global vehicle sales.

  By region, the total figures for the seven OEMs in Japan and North America are nearly flat, but they predict a 4.4% increase in developing markets such as in Asia. In the Chinese market, Nissan expects an increase of 125,000 vehicles to 1.48 million vehicles, while Honda plans to increase its figures from 1.3 million vehicles in FY 2016 to 1.35 million. Suzuki plans to increase its sales in India by 8% from 1.445 million in FY 2016.

Seven OEMS' global light vehicle sales

(1,000 units)

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Plan
units Y-o-Y units Y-o-Y
Toyota 8,871 9,116 8,972 8,681 8,971 3.3% 8,900 -0.8%
Nissan 4,914 5,188 5,318 5,423 5,626 3.7% 5,830 3.6%
Honda 4,014 4,323 4,367 4,743 5,028 6.0% 5,080 1.0%
Suzuki 2,660 2,711 2,868 2,861 2,918 2.0% 3,071 5.2%
Mazda 1,235 1,331 1,397 1,534 1,559 1.6% 1,600 2.6%
Mitsubishi 987 1,047 1,090 1,048 926 -11.6% 1,029 11.1%
Subaru 724 825 911 957 1,065 11.2% 1,105 3.8%
7 OEMs Total 23,405 24,541 24,923 25,247 26,093 3.3% 26,615 2.0%
(Note) 1. Figures for Toyota and Subaru are consolidated vehicle sales. Figures for other OEMs are own-brand vehicle sales, also referred to as "global vehicle sales."
2. Toyota's figures include Hino and Daihatsu's vehicle sales, and do not include sales of vehicles locally produced in China.

Seven OEMS' light vehicle sales by region

(1,000 units)

FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Plan
units Y-o-Y units Y-o-Y
Japan 4,803 5,199 4,797 4,409 4,580 3.9% 4,595 0.3%
North America 6,543 6,900 7,406 7,982 8,225 3.0% 8,224 0.0%
Europe 2,241 2,350 2,473 2,488 2,617 5.2% 2,658 1.6%
Asia and others 9,818 10,092 10,247 10,368 10,671 2.9% 11,138 4.4%
7 OEMs Total 23,405 24,541 24,923 25,247 26,093 3.3% 26,615 2.0%
Source: Seven OEMs' Financial Results


Implementing largest ever capital and research and development investments in FY 2017

Capital investment and R&D spending

  As each OEM struggles with profits, in FY 2017 they plan to invest the most they ever have in capital investments and research and development. The total amount of capital investments by the nine OEMs will increase y/y by 6.9% to JPY 3.2 trillion, exceeding JPY 3 trillion for the first time.

  Research and development investments in FY 2017 are scheduled for a y/y increase of 6.8% to JPY 2.9540 trillion. Toyota's research and development expenses will surpass JPY 1 trillion for the fourth consecutive term. President Toyoda highlighted the importance of research and development investments, stating, "It is my view that our latest financial results demonstrate Toyota's desire to steadily and continuously advance our investment in the future, rather than place top priority on short-term profit." Each automaker will invest in the development of next-generation technology, such as autonomous driving, connected cars, and EVs. Suzuki, Mazda, Mitsubishi Motors and Subaru plan for a two-digit increase in research and development expenses for FY 2017. Subaru will increase its research and development investments by 17.3% y/y to JPY 134 billion and focus on developing EVs and the "EyeSight" driver support system.

  Japanese OEMs have also actively promoted alliances with external institutions to increase efficiency of research and development efforts. In December 2016, Honda began considering joint developments with the Google-related autonomous driving research and development company Waymo, while in May 2017, Toyota began an alliance with the major U.S. image processing semiconductor manufacturer NVIDIA.

Capital Investment and R&D costs

■Capital Investment (in billions of JPY)   ■R&D costs (in billions of JPY)
FY2015 FY2016 YF2017 Plan Growth rate FY2015 FY2016 FY2017 Plan Growth rate
Toyota 1,293 1,212 1,300 7.3% Toyota 1,056 1,038 1,050 1.2%
Nissan 479 469 510 8.7% Nissan 532 490 525 7.1%
Honda 647 541 530 -2.0% Honda 720 685 750 9.4%
Suzuki 172 199 220 10.7% Suzuki 131 132 150 14.1%
Mazda 89 94 120 27.1% Mazda 117 127 140 10.3%
Mitsubishi 69 58 100 72.1% Mitsubishi 79 89 107 20.2%
Subaru 136 159 150 -5.4% Subaru 102 114 134 17.3%
Isuzu 98 94 90 -4.1% Isuzu 91 91 98 7.2%
Hino 88 75 74 -0.7% Hino 61 63 59 -6.5%
9 OEMs total 2,982 2,826 3,020 6.9% 9 OEMs total 2,827 2,766 2,954 6.8%
Source: Nine OEMs' Financial Results


Results of the seven passenger vehicle OEMs in FY 2016 and plans and policies for the years beyond FY 2017

OEM Overview
Toyota   Toyota expects a decrease in sales and profits in FY 2016-2017 for the second consecutive term. In FY 2016, the impact of exchange rate fluctuations caused a decrease in operating profits of JPY 940 billion, a 2.8% decrease in income (JPY 27.5972 trillion), and a 30.1% decrease in operating profits (JPY 1.9943 trillion). In FY 2017, based on assumed exchange rate of USD 1=JPY 105, the OEM expects exchange rate fluctuations to account for a decrease in operating profits of JPY 110 billion, a 0.4% decrease in sales (27.5 trillion), and a 19.8% decrease in operating profits (JPY 1.6 trillion). Its consolidated operating margin is also expected to drop from 10% in FY 2015 to 5.8% in FY 2017.
  Because the overall growth in demand has stopped in North America, the automaker's main source of income, in FY 2016 Toyota's vehicle sales decreased by 2,000 vehicles to 2.837 million vehicles, and they expect a further decline in FY 2017 by 17,000 to 2.82 million vehicles. In FY 2016, Toyota's operating income in the U.S. (income on vehicles produced in North America) totaled JPY 311.1 billion for a y/y decrease of 41.2%, and a loss of 70.7 billion in Q4 (January-March 2017). As price competition intensifies, Toyota is attempting to control its incentives to avoid falling into a prolonged fight.
  Although it is facing a difficult profit environment, Toyota will not refrain from making investments, and in FY 2017, the automaker will invest JPY 1.3 trillion in capital, and JPY 1.05 trillion in research and development. President Toyoda has stated, "The present automobile industry is being asked to make a paradigm shift, for which, as I see it, especially AI, autonomous driving, robotics, connected systems and other new domains will hold important keys. I want to continue planting seeds looking to 10 or even 20 years into the future."
Nissan   Although Nissan set a new record high for global vehicle sales at 5.626 million vehicles in FY 2016, exchange rate fluctuations caused a decrease in operating profits of JPY 281.9 billion, and combined with the increase in sales incentives by JPY 218.2 billion in its U.S. operations, the OEM's consolidated operating profit decreased by 6.4% to JPY 742.2 billion.
  In FY 2017, Nissan's global vehicle sales will expand again by 3.6% to 5.83 million vehicles. Regarding exchange rate fluctuations, the automaker expects the yen to perform similarly against the dollar and Euro as it did in the previous year, but also expects a stronger yen to the British pound and Thai baht, and anticipates this will cause a decrease in profits by JPY 60 billion, and a decrease in operating income by 7.7% to JPY 685 billion (marginal increase in sales by 0.7%). Nissan will continue production at its U.K. plant as planned.
  FY 2016 was the last year of Nissan's 6-year medium term plan, "Nissan Power 88," but failed short of reaching its target global market share of 8% with 6.1%. It also had an operating margin of 6.9% to miss its 8% goal (see note below). Nissan announced that in its new 6-year medium term plan that spans FY 2017-2022, it would aim to achieve sales of JPY 16.5 trillion and an operating margin of 8%.
(Note) In its settlement of accounts in FY 2013, Nissan switched from its previous consolidation method proportionate to its Chinese joint ventures to an equity method applicable to them. Nissan's FY 2016 operating margin was 6.9% with the consolidation method proportionate to its Chinese joint ventures and 6.3% with the equity method applicable to them.
Mitsubishi Motors   Due to the effects of its fuel consumption fraud scandal, Mitsubishi Motors had recorded a 15.9% decrease in sales, an operating income of JPY 5.1 billion, and net loss in the term of JPY 198.5 billion in FY 2016. In FY 2017 the OEM expects its sales to recover to the JPY 2 trillion level, the level prior to the scandal, and expects its operating income to be a little over 1/2 of FY 2014-2015 at JPY 70 billion.
  Along with its settlement of accounts, Mitsubishi Motors announced its new mid-term plan of achieving an operating margin of 6% and global vehicle sales of 1.25 million vehicles by FY 2019. The OEM will expand its sales in China and ASEAN nations. The synergistic effects of its partnership with Nissan will only come to fruition after 2020, including the use of shared platforms, but will aim to create such an effect through purchasing and logistics.
Honda   In FY 2016, Honda achieved new sales records, selling 1.6 million vehicles in the U.S., 1.3 million vehicles in China, and 5.028 million vehicles globally (y/y increase of 6.0%, first time for Honda to exceed 5 million vehicles). Furthermore, thanks to the reduction of expenses related to Takata airbags, which was a major burden in the OEM's FY 2015 settlement of accounts (leading to an increase in profits of JPY 369.6 billion in FY 2016), Honda's operating income increased a significant 67.0% to JPY 840.7 billion.
  In FY 2017, Honda's global vehicle sales will expand to 5.08 million vehicles. The OEM expects an exchange rate of USD 1=JPY 105, which will cause profits to decrease by JPY 95 billion, and operating income to fall 16.1% to JPY 705 billion.
Suzuki   In FY 2016, Suzuki's sales saw a marginal decrease of 0.4%, but its healthy Indian operations resulted in vehicle sales increasing 10.7% to 1.445 million vehicles, and its consolidated subsidiary Maruti Suzuki recorded its highest ever net profit of JPY 125 billion (y/y increase of 37%), leading to Suzuki's consolidated operating income to increase by 36.6% to JPY 266.7 billion.
  In FY 2017, Suzuki's global vehicle sales will exceed 3 million vehicles (3.071 million vehicles) for the first time, and its sales will increase by 7.3% to 3.4 trillion. However, because of its capital investment of JPY 220 billion (10.7% increase) and investments in research and development of JPY 150 billion (14.1% increase), as well as increases in depreciation expenses of JPY 17 billion (JPY 180 billion) for its new Indian plant, the OEM's operating income is expected to decrease by 10% to JPY 240 billion.
Mazda   In FY 2016, Mazda's sales decreased by 5.6%. The automaker's operating income also decreased by 44.6%, making it the largest decline for makers other than Mitsubishi Motors. Because Mazda has a high exportation ratio, the impact of exchange rate fluctuations caused a decrease in profits of JPY 102.7 billion. In FY 2017, the OEM expects its sales to increase by 4.2%, and its operating income to increase by 19.3%. The OEM expects the exchange rate fluctuations to remain the same as in FY 2016 at USD 1=JPY 108 and have no impact on operating profit.
  Mazda began production of its major SUV, the new CX-5, in November 2016. The vehicle was released in Japan in February 2017, and will be sequentially released in overseas markets. The OEM will also release a new three-row seat SUV, the CX-8, to the domestic market in 2017. Likewise, it plans to release the next generation of its SKYACTIV product group in the second half of FY 2018.
Subaru   In FY 2016, Subaru's global vehicle sales exceeded 1 million vehicles for the first time, with 1.065 million vehicles sold. In both FY 2016 and FY 2017, the OEM saw an increase in sales and a decrease in operating profits, but is the only Japanese OEM that has maintained a double-digit operating margin. In FY 2017, increases in sales expenses in the U.S. as well as consolidated research and development expenses are the cause of the decrease in profits. Although sales in the U.S. are healthy, because price competition is intensifying, incentives per vehicle are expected to increase y/y by USD 400 to USD 1,850.
  Subaru plans to increase its research and development expenses in FY 2017 by 17.3% y/y to JPY 134 billion. The OEM will advance developments of EVs and its "EyeSight" driver support system. The automaker claims it won't suppress investments for the future in order to merely protect its profits. In 2018, the OEM plans to release the large three-row Ascent SUV, in the North American market. In 2021 the OEM also plans to release an EV in the U.S.
Source: Financial Results of each company, various newspaper reports


Production Forecast by LMC Automotive: Japanese light vehicle production hover around 8.8 million in the medium to long term

(LMC Automotive Apr. 2017)

Japanese Light Vehicle Production Forecast

  According to LMC Automotive's production forecast (April 2017), light vehicle production in Japan in 2017 will be 8.76 million units, down 0.3% from 2016. Production in Japan will recover to 9 million units in 2018 and reach to 9.21 million units in 2019, however, it will decrease to 8.82 million units in 2020. As for the export outlook, LMC Automotive comments; "Although demographic issues in Japan will ultimately cause the domestic sales market to contract, exports are set to expand progressively, reaching 4.5 mn units longer term, supported by steady demand growth in overseas markets. In this latest edition of our report, we have upgraded the Japanese export outlook by circa 30-50k units a year, based on the addition of export volumes of several models, including the Lexus GX, for example."

  Furthermore, regarding exchange rate risk; "Although the yen weakened to JPY 118 to the US dollar last year, we have no current plans to adjust our export estimates simply on the basis of this fluctuation in the exchange rate. As outlined previously, this decision is supported by the growing trend for Japanese automakers to hedge currency risks by moving production to overseas bases, with build being focused in local sales markets around the world, thus ensuring less exposure to exchange rate variations at home."

  Toyota's production in 2017 will be 3.82 million units, down 3.3% from 2016. It will recover to around 3.96 million units between 2018 and 2019, however, it will decrease to 3.72 million units in 2020. Production of the CH-R finally started in Japan in November 2016. On 27 January 2017, Toyota added a hybrid derivative of the Vitz in Japan.

  Renault-Nissan Group, including Mitsubishi, will keep growth in the medium term and its production will increase from 1.50 million in 2016 to 1.79 million in 2020. In November 2016, Nissan added the Note e-POWER, a hybrid derivative of the Note, to the Japanese market. The launch of this new derivative propelled the Note to the top spot as the bestselling model in November last year, adding circa 10k units to its monthly sales tally.

  LMC Automotive comments; "A number of leading automakers are launching PHV models in the Japanese market in a bid to capture the "post-hybrid market". These include Toyota, which launched the all-new Prius PHV in February 2017. The group has also announced its plan to invest more heavily in the development of EV technology, which will undoubtedly lead to even fiercer competition between fuel-efficient models in the market."

Japanese Light Vehicle Production Forecast

(Units)

GLOBAL
MAKE
2014 2015 2016 2017 2018 2019 2020
Total 9,388,395 8,859,589 8,786,109 8,759,373 9,002,537 9,213,566 8,819,336
Toyota Group Toyota 2,755,035 2,706,873 2,819,004 2,544,352 2,630,888 2,597,096 2,432,218
Lexus 494,616 542,633 500,452 529,080 609,130 681,436 665,323
Daihatsu 703,677 631,878 576,751 712,573 697,263 644,308 588,470
Hino 65,931 55,423 55,359 38,753 31,481 33,179 32,712
Scion 41,866 28,455 5,504 0 0 0 0
Toyota Group sub-total 4,061,125 3,965,262 3,957,070 3,824,758 3,968,762 3,956,019 3,718,723
Renault-Nissan Group Nissan 1,002,458 902,660 928,931 1,009,952 1,022,924 1,076,225 1,086,548
Mitsubishi 467,450 469,809 432,795 442,707 522,035 539,924 539,646
Infiniti 122,836 128,721 137,040 155,114 157,270 164,116 166,897
Renault-Nissan Group sub-total 1,592,744 1,501,190 1,498,766 1,607,773 1,702,229 1,780,265 1,793,091
Mazda Motors Mazda 990,234 974,778 926,032 942,442 1,052,907 1,053,690 1,060,298
Honda Group Honda 953,373 717,283 816,994 787,853 814,562 894,600 778,840
Acura 3,675 2,402 2,033 1,972 2,301 2,148 3,180
Honda Group sub-total 957,048 719,685 819,027 789,825 816,863 896,748 782,020
Suzuki Group Suzuki 902,979 815,096 685,588 772,084 722,088 744,666 681,797
Subaru Corporation Subaru 711,434 722,717 735,750 683,572 610,180 651,188 655,286
Isuzu Motors Isuzu 118,986 104,885 97,678 82,528 77,481 78,288 77,010
Daimler Group Fuso 31,988 33,602 29,396 29,102 26,626 27,340 25,780
PSA Group Citroen 13,017 13,484 10,831 7,462 7,866 7,915 7,865
Peugeot 8,020 8,844 5,643 5,710 5,972 6,025 6,041
PSA Group sub-total 21,037 22,328 16,474 13,172 13,838 13,940 13,906
Fiat Chrysler Automobiles Fiat 0 0 20,277 14,067 11,509 11,365 11,371
Other UD Trucks 820 46 51 50 54 57 54
Source: LMC Automotive "Global Automotive Production Forecast (April 2017)
(Note) 1. Data indicate figures of only small-size vehicles, including passenger cars and light commercial vehicles with a gross vehicle weight of under 6 tons.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
3. For more detailed information or inquiries about forecast data, please contact LMC Automotive.


Fact sheets (part 1): Consolidated sales/ operating profit/net income, Operating profit margin/net income margin, Foreign exchange rates

Nine Japanese OEMs' Sales/ Operating profit/Net income

(in billions of JPY)

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Plan
Sales Toyota 18,994 18,584 22,064 25,692 27,235 28,403 27,597 27,500
Nissan 8,773 9,409 8,737 10,483 11,375 12,190 11,720 11,800
Honda 8,937 7,948 9,878 11,842 13,328 14,601 13,999 14,200
Suzuki 2,608 2,512 2,578 2,938 3,016 3,181 3,170 3,400
Mazda 2,326 2,033 2,205 2,692 3,034 3,407 3,214 3,350
Mitsubishi 1,829 1,807 1,815 2,093 2,181 2,268 1,907 2,000
Subaru 1,581 1,517 1,913 2,408 2,878 3,232 3,326 3,420
Isuzu 1,416 1,400 1,656 1,761 1,879 1,927 1,953 1,990
Hino 1,243 1,315 1,541 1,700 1,685 1,746 1,684 1,720
Total 46,462 45,211 50,847 59,910 64,925 69,208 66,886 67,660
Operating profit Toyota 468 356 1,321 2,292 2,751 2,854 1,994 1,600
Nissan 538 546 439 498 590 793 742 685
Honda 570 231 545 750 671 503 841 705
Suzuki 107 119 145 188 179 195 267 240
Mazda 24 -39 54 182 203 227 126 150
Mitsubishi 40 64 67 123 136 138 5 70
Subaru 84 44 120 327 423 566 411 410
Isuzu 88 97 131 174 171 172 146 152
Hino 29 38 65 112 106 98 71 75
Total 1,919 1,418 2,822 4,535 5,123 5,448 4,532 4,012
Net income Toyota 408 284 962 1,823 2,173 2,313 1,831 1,500
Nissan 319 341 341 389 458 524 664 535
Honda 534 211 367 574 509 345 617 530
Suzuki 45 54 80 108 97 117 160 145
Mazda -60 -108 34 136 159 134 94 100
Mitsubishi 16 24 38 105 118 73 -199 68
Subaru 50 39 120 207 262 437 282 285
Isuzu 52 91 97 119 117 115 94 99
Hino -10 16 48 89 75 65 49 50
Total 1,364 936 2,039 3,460 3,893 4,056 3,543 3,262
Source: Nine OEMs' Financial Results

Nine Japanese OEMs' Operating income margin /Net income margin

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Plan
Operating income Toyota 2.5% 1.9% 6.0% 8.9% 10.1% 10.0% 7.2% 5.8%
Nissan 6.1% 5.8% 5.0% 4.8% 5.2% 6.5% 6.3% 5.8%
Honda 6.4% 2.9% 5.5% 6.3% 5.2% 3.4% 6.0% 5.0%
Suzuki 4.1% 4.7% 5.6% 6.4% 5.9% 6.1% 8.4% 7.1%
Mazda 1.0% -1.9% 2.4% 6.8% 6.7% 6.7% 3.9% 4.5%
Mitsubishi 2.2% 3.5% 3.7% 5.9% 6.2% 6.1% 0.3% 3.5%
Subaru 5.3% 2.9% 6.3% 13.6% 14.7% 17.5% 12.4% 12.0%
Isuzu 6.2% 7.0% 7.9% 9.9% 9.1% 8.9% 7.5% 7.6%
Hino 2.3% 2.9% 4.2% 6.6% 6.3% 5.6% 4.2% 4.4%
Total 4.1% 3.1% 5.5% 7.6% 7.9% 7.9% 6.8% 5.9%
Net income Toyota 2.1% 1.5% 4.4% 7.1% 8.0% 8.1% 6.6% 5.5%
Nissan 3.6% 3.6% 3.9% 3.7% 4.0% 4.3% 5.7% 4.5%
Honda 6.0% 2.7% 3.7% 4.8% 3.8% 2.4% 4.4% 3.7%
Suzuki 1.7% 2.1% 3.1% 3.7% 3.2% 3.7% 5.0% 4.3%
Mazda -2.6% -5.3% 1.6% 5.0% 5.2% 3.9% 2.9% 3.0%
Mitsubishi 0.9% 1.3% 2.1% 5.0% 5.4% 3.2% -10.4% 3.4%
Subaru 3.2% 2.5% 6.3% 8.6% 9.1% 13.5% 8.5% 8.3%
Isuzu 3.6% 6.5% 5.8% 6.8% 6.2% 6.0% 4.8% 5.0%
Hino -0.8% 1.2% 3.1% 5.2% 4.4% 3.7% 2.9% 2.9%
Total 2.9% 2.1% 4.0% 5.8% 6.0% 5.9% 5.3% 4.8%
Source: OEMs' financial results

Foreign exchange rates

(JPY)

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Forecast
US Dollar Toyota 86 79 83 100 110 120 108 105
Nissan 85.7 79.1 82.9 100.2 109.8 120.2 108.3 108.0
Honda 86 79 84 100 110 120 108 105
Suzuki 86 79 83 100 110 120 108 110
Mazda 86 79 83 100 110 120 108 108
Mitsubishi 85 79 82 100 109 121 109 105
Subaru 86 79 82 100 108 121 108 110
Isuzu 85 79 82 98 107 120 109 110
Hino 86 79 82 100 109 120 109 110
Average 85.7 79.0 82.7 99.8 109.2 120.2 108.4 107.9
Euro Toyota 113 109 107 134 139 133 119 115
Nissan 113.1 109.0 106.8 134.2 138.7 132.6 118.7 118.0
Honda 114 108 108 136 139 - - -
Suzuki 113 109 107 134 139 133 119 115
Mazda 113 109 107 134 139 133 119 118
Mitsubishi 113 111 105 134 139 133 119 115
Subaru 114 108 106 133 140 133 119 120
Average 113.3 109.0 106.7 134.2 139.1 132.9 119.0 116.8
Source: OEMs' Financial Results


Fact sheets (part 2): Seven OEMs' Light vehicle sales by region, Capital investment/Depreciation expenses/R&D costs

Seven OEMs' light vehicle sales by region

(1,000 units)

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Plan
Japan Toyota 1,913 2,071 2,279 2,365 2,154 2,059 2,274 2,200
Nissan 600 655 647 719 623 573 557 595
Honda 582 588 692 818 761 668 668 680
Suzuki 588 596 672 728 756 630 639 645
Mazda 206 206 216 244 225 232 203 213
Mitsubishi 164 152 134 143 115 102 80 90
Subaru 158 172 163 182 163 145 159 172
Total 4,211 4,440 4,803 5,199 4,797 4,409 4,580 4,595
North America Toyota 2,031 1,872 2,469 2,529 2,715 2,839 2,837 2,820
Nissan 1,245 1,404 1,466 1,648 1,829 2,011 2,130 2,140
Honda 1,458 1,323 1,731 1,757 1,750 1,929 1,970 1,920
Suzuki 33 32 30 - - - - -
Mazda 342 372 372 391 425 438 429 454
Mitsubishi 94 106 85 97 117 135 138 148
Subaru 307 309 390 478 570 630 721 742
Total 5,510 5,418 6,543 6,900 7,406 7,982 8,225 8,224
Europe Toyota 796 798 799 844 859 844 925 920
Nissan 607 713 660 676 755 754 776 795
Honda 198 158 171 169 161 172 184 175
Suzuki 244 223 197 205 195 207 245 267
Mazda 212 183 172 207 229 257 262 267
Mitsubishi 218 218 181 202 227 206 179 188
Subaru 60 55 61 47 47 48 46 46
Total 2,335 2,348 2,241 2,350 2,473 2,488 2,617 2,658
Asia & other regions Toyota 2,568 2,611 3,324 3,378 3,244 2,939 2,935 2,960
Nissan 1,733 2,073 2,141 2,145 2,111 2,085 2,163 2,300
Honda 1,274 1,039 1,420 1,579 1,695 1,974 2,206 2,305
Suzuki 1,778 1,710 1,761 1,778 1,917 2,024 2,034 2,159
Mazda 513 486 475 489 518 607 665 666
Mitsubishi 511 525 587 605 631 605 529 603
Subaru 132 104 110 118 131 134 139 145
Total 8,509 8,548 9,818 10,092 10,247 10,368 10,671 11,138
Worldwide Toyota 7,308 7,352 8,871 9,116 8,972 8,681 8,971 8,900
Nissan 4,185 4,845 4,914 5,188 5,318 5,423 5,626 5,830
Honda 3,512 3,108 4,014 4,323 4,367 4,743 5,028 5,080
Suzuki 2,643 2,560 2,660 2,711 2,868 2,861 2,918 3,071
Mazda 1,273 1,247 1,235 1,331 1,397 1,534 1,559 1,600
Mitsubishi 987 1,001 987 1,047 1,090 1,048 926 1,029
Subaru 657 640 724 825 911 957 1,065 1,105
Total 20,565 20,753 23,405 24,541 24,923 25,247 26,093 26,615
Source: Seven OEMs' Financial Results

Nine Japanese OEMs' Capital investment/Depreciation expenses/R&D costs

(in billions of JPY)

FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Plan
Capital investment Toyota 642 707 853 1,001 1,177 1,293 1,212 1,300
Nissan 312 406 469 536 463 479 469 510
Honda 311 407 594 726 658 647 541 530
Suzuki 130 127 169 214 195 172 199 220
Mazda 45 78 77 133 131 89 94 120
Mitsubishi 53 71 51 72 68 69 58 100
Subaru 43 54 70 69 111 136 159 150
Isuzu 29 33 58 82 78 98 94 90
Hino 30 43 50 66 69 88 75 74
Total 1,566 1,883 2,341 2,833 2,881 2,982 2,826 3,020
Depreciation Expenses Toyota 812 733 727 776 806 885 893 950
Nissan 372 334 297 347 373 402 381 374
Honda 325 294 287 346 408 440 438 450
Suzuki 138 103 94 117 134 168 163 180
Mazda 72 69 60 58 69 79 82 87
Mitsubishi 63 53 50 53 53 54 46 53
Subaru 50 54 56 55 65 65 77 92
Isuzu 36 36 36 42 48 56 59 60
Hino 46 44 41 38 38 43 44 55
Total 1,869 1,676 1,606 1,793 1,957 2,149 2,139 2,246
R&D costs Toyota 730 780 807 911 1,005 1,056 1,038 1,050
Nissan 399 428 458 501 506 532 490 525
Honda 488 520 560 634 663 720 685 750
Suzuki 104 110 119 127 126 131 132 150
Mazda 91 92 90 99 108 117 127 140
Mitsubishi 49 55 60 68 75 79 89 107
Subaru 43 48 49 60 84 102 114 134
Isuzu 59 59 61 67 78 91 91 98
Hino 41 40 43 46 50 61 63 59
Total 1,963 2,091 2,205 2,466 2,643 2,827 2,766 2,954
Source: OEMs' Financial Results

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Key words

Financial Results, Foreign exchange rate fluctuation, US Auto market, Capital investment/R&D expenses

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