Japanese automakers: Future direction and plans based on recently announced financial results

OEMs aim to improve profitability for U.S. operations, expand business in China further

2018/06/19

Summary

Nine OEM's Cosolidated Sales
Nine OEM's Cosolidated Sales

This report is based on the fiscal year 2017 financial results announced by the 9 publicly listed automakers in Japan. It addresses the fiscal year 2018 financial forecasts of these OEMs, as well as their future direction and plans.

Regarding the fiscal year 2017 financial results, highlights are provided at the beginning of this report, while the latter half addresses the data actuals for FY 2017 such as sales revenue, profit, sales volumes, and exchange rates, as well as the forecasts for fiscal year 2018.

In addition, this report includes LMC Automotive forecasts of production volumes by brand in Japan until 2021.

Among the favorable financial results for fiscal year 2017, there were a number of cautious views regarding the future financial outlook for Japanese OEMs. Each automaker is concerned with any unfavorable impact from the appreciation of the yen, and automakers are seeking to realize efficiencies throughout their organizations to secure the massive amounts of funding required to successfully compete in the new technological fields collectively referred to as CASE (Connected, Autonomous, Shared, and Electric). Toyota announced that it will further strengthen its earnings power leveraging its Toyota Production System (TPS) and its cost reduction capabilities. Honda will enhance its six-region global operation structure and lower its global production capacity from 5.55 million units as of March 2016 to 5.27 million units in 2022 to improve production efficiency.



Related report:
Japanese OEMs' financial outlook: Expectation of declining profits (June 2017)

 



Fiscal year 2017 financial results and forecasts for fiscal year 2018

In the fiscal year 2017 financial results announced by the 9 publicly listed automakers in Japan, total net sales was JPY 71.6 trillion (up 7.0% from the previous year), operating income was JPY 5 trillion (9.7% increase), and net income was JPY 5 trillion (42.9% increase). All 9 automakers increased their sales revenue, but, Nissan, Honda and Subaru reported decreases in operating income, while the other 6 OEMs reported increases.

The sharp rise in net income of the OEMs was largely due to the favorable impact of lower U.S. corporate tax rates implemented by the Trump administration in the United States. Toyota's net income increased 36.2% to JPY 2,493.9 billion, with JPY 249.6 billion the result of the tax cuts, Nissan net income increased 12.6% to JPY 746.9 billion, and Honda net income increased 71.8% to JPY 1,595.3 billion, with each company setting record high net income earnings. The net income margins of the four automakers exceeded 6.0%, with Toyota in first place at 8.5%, followed by Nissan, Honda, and Subaru.

The impact of currency fluctuations was the result of a JPY 2.6 depreciation in the average assumed value of the JPY for all 9 companies of USD 1 = JPY 108.4, decreasing to USD 1 = JPY 111. For the EUR, the JPY depreciated JPY 11, from JPY 119 to JPY 130 = EUR 1. With the exception of Nissan, the impact of foreign exchange fluctuations was positive, and the total for all 9 companies was JPY 409.3 billion.


In the forecast for fiscal year 2018, the total sales revenue for the 9 automakers is expected to be almost flat (up 0.2%). With regards to operating income and loss, assuming an exchange rate of USD 1 = JPY 105, the impact of currency fluctuations is expected to be negative by JPY 715.6 billion, and total operating income is forecasted to be JPY 4,570 billion (down 8.1%).

Nine OEM's Operating income and Net income Seven OEM's Operating Income Margin



Nine Japanese OEMs' Consolidated Sales and Profit

(in billions of JPY)

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Forecast
Sales 45,211 50,847 59,910 64,925 69,208 66,886 71,591 71,740
Operating income 1,418 2,822 4,535 5,123 5,448 4,532 4,973 4,571
Operating income margin 3.1% 5.5% 7.6% 7.9% 7.9% 6.8% 6.9% 6.4%
Net income 936 2,039 3,460 3,893 4,056 3,543 5,062 3,915
Year-over-year comparison
Sales -2.7% 12.5% 17.8% 8.4% 6.6% -3.4% 7.0% 0.2%
Operating income -26.1% 98.9% 60.7% 13.0% 6.3% -16.8% 9.7% -8.1%
Net income -31.4% 117.8% 69.7% 12.5% 4.2% -12.7% 42.9% -22.7%

Source: Nine Japanese OEMs' Financial Results



OEMs' business plan for FY2018

(in billions of JPY)

Sales Operating income
FY2016 FY2017 Growth
rate
FY2018
Forecast
Growth rate FY2016 FY2017 Growth
rate
FY2018
Forecast
Growth rate
Toyota 27,597 29,380 6.5% 29,000 -1.3% 1,994 2,400 20.3% 2,300 -4.2%
Nissan 11,720 11,951 2.0% 12,000 0.4% 742 575 -22.6% 540 -6.0%
Honda 13,999 15,361 9.7% 15,600 1.6% 841 834 -0.9% 700 -16.0%
Suzuki 3,170 3,757 18.5% 3,800 1.1% 267 374 40.3% 340 -9.1%
Mazda 3,214 3,474 8.1% 3,550 2.2% 126 146 16.5% 105 -28.3%
Mitsubishi 1,907 2,192 15.0% 2,400 15.0% 5 98 1818.6% 110 9.5%
Subaru 3,326 3,405 2.4% 3,250 -4.6% 411 379 -7.6% 300 -20.9%
Isuzu 1,953 2,070 6.0% 2,140 3.4% 146 167 13.9% 176 5.5%
Hino 1,684 1,838 9.2% 1,860 1.2% 71 80 12.8% 83 3.3%
Nine OEMs 66,886 71,591 7.0% 71,740 0.2% 4,532 4,973 9.7% 4,571 -8.1%

Source: OEMs' Financial Results
Note: 1. Toyota's consolidated financial results include Daihatsu and Hino. As Hino's figures are included in Toyota's consolidated financial results, the above data for the 9 companies does not accurately total.
2. The data above does not include Mitsubishi Fuso Truck and Bus and UD Trucks, which are not publicly listed.



Impact of foreign currency fluctuations on operating income

(in billions of JPY)

FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Forecast
Exchange rate forecast for FY2018 (JPY)
USD EUR
Toyota 900 280 160 (940) 265 (230) 105 130
Nissan 248 69 (13) (282) (5) (135) 105 130
Honda 289 79 (60) (283) 22 (207) 105 -
Suzuki 54 22 (3) (79) 38 (22) 105 130
Mazda 113 17 (42) (103) 40 (22) 107 130
Mitsubishi 66 12 (17) (78) 9 (31) 105 130
Subaru 170 104 108 (144) 33 (58) 105 130
Isuzu 25 8 8 (30) 7 (10) 105 -
Total 1,865 591 140 (1,938) 409 (716) 105 130

Source: OEMs' Financial Results
Note: Hino has not announced statements regarding the impact of exchange rate fluctuations.

 

 



U.S. market profitability declines, aiming for further expansion in China

Looking at the two largest automobile markets in the world, the U.S. and China, the difference in market momentum is noticeable. In the U.S. market, profitability has declined due to intensified sales competition and sluggish sales of passenger cars in the medium to small market segment, where Japanese OEMs have previously excelled. Toyota, Nissan, Honda and Subaru have each announced that they will be working to improve profitability. According to a May 29th article in the Nihon Keizai Shimbun newspaper, until the summer of 2018 Nissan will reduce the production of passenger cars in the U.S. and Mexico by 10 to 20 percent. Honda is also reducing production volumes of its mainstay sedan, the Accord.

Automakers are also concerned that the Trump administration has started to consider raising the tariffs on passenger cars imported to the United States from 2.5% to 25%.

In the Chinese market, Toyota, Nissan, Honda and Mitsubishi aim to further expand its business in China, which includes the introduction of EVs and PHVs. Toyota's profitability growth in China is steady, with its equity earnings in China increasing from JPY 85.1 billion in fiscal year 2016 to JPY 88.9 billion in fiscal 2017, and Honda's global equity earnings, including China, increased from JPY 164.7 billion to JPY 247.6 billion.

The Chinese government has announced that it will reduce tariffs imposed on imported passenger cars from 25% to 15% from July 2018. As a result, the import of luxury cars is expected to increase.

 

 



Fiscal year 2018 and the future direction of passenger car automakers

Below are summarized the future direction and plans of passenger car automakers based on the forecasts of their financial results for fiscal year 2018.


Toyota: Toyota's president Akio Toyoda has declared that Toyota decided to change its business model from a car-making company to one that will provide all types of services related to mobility. Toyota's strengths lie in its Toyota Production System (TPS) and its cost reduction capabilities. Toyota is in the process of implementing the principles of its TPS production philosophy throughout the entire Toyota Group to strengthen its cost-reduction capabilities and enhance its earnings power in an effort to compete with technology companies, backed by abundant funding, who are continuing to invest in new technologies.

President Toyoda summed up the company's fiscal year 2017 financial results stating that its "Toyota Way" efforts are becoming more apparent with the steady improvement in its financial results.



Toyota's Future Direction and Plans

Forecasting decreased profitability for FY 2018 In its fiscal year 2017 financial results, Toyota reported record net sales (JPY 29,379.5 billion) and net income (JPY 2,493.9 billion). In fiscal year 2018, Toyota is forecasting the negative impact of currency fluctuations to be JPY 230 billion, assuming USD 1 dollar = JPY 105 yen and EUR 1 = JPY 130, with net sales of JPY 29 trillion (1.3% decrease), an operating income of JPY 2.3 trillion (4.2% decrease), and net income of JPY 2,120 billion (15.0% decrease).
Capital investment and R&D expenses Capital investment in fiscal year 2018 is JPY 1,370 billion, and research and development expenses are JPY 1.08 trillion, both reflecting historical highs for two consecutive years. Toyota will invest 35% of its R&D expenses into next-generation technologies such as autonomous driving, connected cars, and electrification.
Acquiring funds to implement major reform Toyota believes that the automobile industry is entering an era of profound transformation, the likes of which come only once every 100 years, with its rivals and the rules of competition also changing, beginning a life-or-death battle in a world of unknowns. Again, Toyota will strive to increase its earnings power leveraging the Toyota Production System (TPS) and cost reduction capabilities to create the requisite capital investment funds for the future.
Toyota is expanding its TPS production philosophy to all departments in the Toyota Group and conducting a thorough review of its fixed costs and waste, leading to the reduction in the total operating costs of its entire organization. Toyota plans to conduct a review of its vehicle specifications, reconsider how to more effectively hold meetings, and to reduce unnecessary documentation.
Now that TNGA has entered its second round, Toyota will introduce the TPS principles to determine the necessary time and cost per unit of output to shorten development lead times. Toyota also introduced its "just in time" concept for mobility services, and is challenging itself to greatly shorten the lead times needed to provide mobility services.
Regional measures By region, Toyota is executing projects to quickly rebuild its operations in the U.S. where profitability has declined due to an increase in SG&A expenses. In China, Toyota's plans aim to expand its sales volumes from the 1.29 million units sold in 2017 to 1.4 million units in 2018.
Toyota formed a business partnership with Suzuki in February 2017 and the two companies have agreed to start the following new collaborative projects: (1) Denso and Toyota will provide technical support to a compact ultra-high efficiency powertrain to be developed primarily by Suzuki. (2) Toyota Kirloskar Motors Pvt. Ltd. (hereinafter referred to as TKM) will assemble a vehicle developed by Suzuki to sell in India under the brand names of both Toyota and Suzuki. (3) Vehicles supplied by both Toyota and Suzuki, including the aforementioned TKM production model, will be sold by the sales networks of both companies in India as well as exports to markets such as Africa, and the two companies will increase their collaboration in the areas of logistics and services.



Nissan: Nissan is forecasting a decline in operating income for the third consecutive year from fiscal years 2016 to 2018. In fiscal year 2018, Nissan plans to reduce SG&A expenses in the U.S. and improve profitability. In addition, Nissan plans to increase its sales volumes in China by more than 1 million units, from 1.52 million units in 2017 to 2.6 million units in 2022.



Nissan's Future Direction and Plans

Operating income declines for 3 consecutive years Nissan's sales growth rate in fiscal year 2017 was 2.0%, which was lower than the 7.0% average growth rate of the 9 Japanese OEMs, with an operating income decline of 22.6%. Nissan's full-year operating income margin was 4.8%, which fell far short of its target of 8%. Nissan's poor financial performance in FY 2017 can be attributed to recall costs associated with the vehicle inspection scandal, costs related to the Takata airbag recall, and increased SG&A expenses in the U.S. Net income reached a record high at JPY 746.9 billion due to the favorable impact of lower U.S. corporate tax rates.
In fiscal year 2018, Nissan expects operating income to decrease by JPY 540 billion (6.0%) due to a number of factors such as stagnant sales (up 0.4%), the impact of adverse foreign exchange fluctuations (JPY 135 billion), a surge in raw material costs (JPY 80 billion), and increased research and development expenses. As a result, Nissan is forecasting operating income to decline for the third consecutive year including fiscal year 2016.
Improve profitability revenue growth in the U.S. In the U.S. market, Nissan aims to increase growth in the midterm, but in fiscal year 2018 will focus on increasing individual sales, while decreasing fleet sales, with the aim of improving profitability while minimizing SG&A expenses. During the spring and summer months of 2018 Nissan plans to reduce passenger car production volumes in the U.S. and Mexico by 10% to 20%. The U.S. sales volume target for 2018 is 1.55 million units (down 2.7%).
Plans to increase China market volumes by 1 million units by 2022 Nissan is aiming for significant growth in the Chinese market. According to the new mid-term plan of Dongfeng Motor Co., Ltd. announced in February 2018, the company plans to increase the unit sales from 1,520,000 units in 2017 to 1 million units to 2.62 million units in 2022. Nissan plans to introduce more than 20 electrified vehicles (electric cars and e-Power models), and will introduce six models of electric vehicles under the Nissan, Venucia and Dongfeng brand names from 2018 to 2019. In 2022, Nissan plans for electrified vehicles to comprise 30% of its total sales volumes.
At the Beijing Motor Show 2018, Nissan exhibited the Sylphy EV, which will be assembled locally in China.



Honda: Honda plans to revamp its global production and supply systems, reduce global production capacity to 5.27 million units, and increase operating efficiencies.



Honda's Future Direction and Plan

Two consecutive years of lower operating income In fiscal year 2017, sales revenue increased 9.7% to JPY 15,361.1 billion, but operating income decreased slightly by 0.9% due to the impact of pension plan amendments in the previous fiscal year (JPY 84 billion) and losses stemming from the class action litigation settlement related to Takata airbag inflators (JPY 53.7 billion). Consolidated net income for the period was the highest ever recorded at JPY 1,059.3 billion, mainly due to the favorable impact of lower U.S. corporate tax rates (JPY 346.1 billion).
In fiscal year 2018, sales are forecasted to increase slightly by 1.6% (JPY 15,600 billion). But, Honda is forecasting an operating income decline of 16.0% (JPY 700 billion) due to factors such as unfavorable foreign currency translation effects (JPY 207.2 billion) and an increase in selling expenses (JPY 51 billion).
Adjust production and supply system, and increase efficiency Honda aims to improve its operating efficiency by changing its global production infrastructure. Honda will enhance its six-region global operation structure, originally aimed to decentralize and improve the independence of its six regions of the world with regards to development, production and sales, to one in which there will be more inter-regional cooperation and coordination. In addition, Honda will adjust its global production capacity to 5.27 million in 2022 to be more in line with the current global sales level. (Refer to the presentation slide below.)
Rebuild U.S. market position In North America, Honda's core market, operating income by geographic area in FY 2017 decreased by 30.2% (JPY 278.4 billion). In the U.S. market, sales growth has stalled and competition has intensified. Honda is currently adjusting its production volume for the Accord. In an effort to revive sales growth in the North American market, Honda will launch a new Accord HV in March 2018 and release the Insight HV in the second half of 2018.
Actively entering the EV and car sharing markets in China In the Chinese market, Honda will aggressively promote the introduction of electric vehicles and car sharing services. At the Beijing Motor Show in April 2018 Honda announced that it will introduce more than 20 EV models by 2025. In 2018 Honda will introduce the production version of its "Philosophy Everus EV Concept" model, the first vehicle that has been designed exclusively for the Chinese market, as well as introduce the Accord Hybrid. The Everus EV Concept will also be used for EV car sharing in collaboration with Reachstar, a car sharing service company in China that Honda has partnered with.
Honda has partnered with Contemporary Amperex Technology (CATL) in China, the world's largest battery maker, to jointly develop a new battery to be used for Honda's main electric vehicle (EV) models in China. The two companies will collaborate on the development of batteries and related technologies for EVs to be produced for the mass market in China and elsewhere in the early 2020s.

グローバル補完体制 グロ-バル生産体制 電動車投入計画
Honda's FY 2017 Financial Results



Suzuki: In fiscal year 2017, Suzuki's financial results showed sales in Asia and Europe had increased, and that the automaker posted record results in all areas with respect to the number of vehicles sold, sales revenue, and profitability. In fiscal year 2018, Suzuki is forecasting an increase in vehicle sales as well as lower profitability due to the appreciation of the yen and increases in R&D expenses.



Suzuki's Future Direction and Plans

Record sales and profitability In fiscal year 2017, Suzuki achieved record-breaking worldwide sales of 3.224 million units (10.5% increase), sales of JPY 3,750.7 billion (18.5% increase), operating income of JPY 374.2 billion (40.3% increase), and an operating income margin of 10.0% (2nd place behind Subaru at 11.1%).
Maintain good performance in India Sales in India in fiscal year 2017 increased by 14.5% from the previous year to 1,654,000 units. In fiscal year 2018, Suzuki is expecting a further increase of 6% for the full year. Sales in Europe in fiscal year 2017 increased by 14.9% to 281,000 units.
Strengthen investment in next generation technology Sales revenue in fiscal year 2018 is projected to rise slightly by 1.1% to JPY 3.8 trillion. However, Suzuki is forecasting that overall profitability will decrease as a result of factors such as the appreciation of the yen exchange rate and plans to invest a record JPY 160 billion (up 14.8%) on R&D expenses toward strengthening of next-generation technologies associated with vehicle electrification and autonomous driving.



Mazda: Following the "Structural Reform Stage 2" of its current mid-term 2016-2018 business plan, Mazda announced the future direction of the business activities that it plans to undertake going forward. With steps such as the introduction of its next-generation of SKYACTIV products, the strengthening of its sales footprint, and the launch of a new plant in the U.S., Mazda aims to achieve strong profit growth in and after FY 2021 and sell 2 million units worldwide in FY 2023.



Mazda's Future Direction and Plans

Aims for stable sales of 400,000 units in the U.S.

Sales in fiscal year 2017 increased 8.1% to JPY 3,474.0 billion, and operating income increased by 16.5% to JPY 146.4 billion. In fiscal year 2018, Mazda plans to invest JPY 10 billion in its U.S. sales network in preparation for joint operation of a U.S. assembly plant with Toyota (Mazda will invest a total of JPY 40 billion over the next 4 years). Mazda is targeting stable sales of 400,000 units in the U.S. (304,000 units sold in FY 2017), expecting the yen to appreciate (Exchange rate assumption: JPY 107 per USD), and forecasting that operating income will decline to JPY 105 billion (28.3% decrease).

Aims for global sales of 2 million units in FY 2023 Mazda announced the direction of the efforts it plans to implement in FY 2019-23 based on the results of its FY 2012-15 "Structural Reform Plan" and its FY 2016-18 "Structural Reform Stage 2" mid-term strategic business plans. In the planning period from 2018 to 2021, a time of "structural consolidation." Building a solid foundation for strong profit growth from FY 2021, Mazda will add a total investment of JPY 250 billion on an ordinary annual basis of JPY 100 billion, primarily to build a new plant in the U.S. Mazda aims to sell 1.8 million units in FY 2021 with the start of operations at its new plant in the U.S. plant and sell 2 million units in FY 2023.
Second generation SKYACTIV portfolio launched Regarding product development, all vehicles in Mazda's SKYACTIVE Gen 2 portfolio will be divided into two product groups: "Small Products" centering on the CX-3 and "Large Products", with the CX-5 as the main model. The Small Products portfolio is targeted to achieve increased cost competitiveness and production flexibility, aiming at annual sales of 1.2 million units, while the Large Products portfolio will enhance the variation of its powertrain offerings, including electrification, aiming at annual sales of 800,000 units.
For the SKYACTIV Generation 2 portfolio, Mazda plans to strengthen its electric vehicle offerings such as EVs, Plug-in HVs, Mild HVs, and Range Extender models in cooperation with Toyota.

次世代商品/新技術の開発・導入 販売ネットワーク改革の加速 2021年度以降の本格的成長に向けて
Mazda's FY 2017 Financial Results



Mitsubishi: MMC launched its global strategic model, the Eclipse Cross, in the Japanese market, and plans to assemble new PHVs locally in China with the aim of achieving a V-shaped financial recovery.



MMC's Future Direction and Plans

From recovery to growth In fiscal year 2017, global sales volumes of MMC vehicles exceeded that of FY 2016 levels when it experienced the scandal regarding misconduct in the falsification of fuel economy data. In FY 2017 MMC expanded sales in Southeast Asia and China, recovering to 1,101,000 units (representing a 18.9% increase from the previous year), with net sales of JPY 2,192 billion (15.0% increase), and an operating income of JPY 98.2 billion (19-fold increase).
For fiscal year 2018 MMC is forecasting global vehicle sales of 1.25 million units (13.5% increase), net sales of JPY 2.4 trillion (15.0% increase), and a net income of JPY 110 billion (9.5% increase).
Focus on ASEAN and China In October 2017, Mitsubishi launched its "Drive for Growth" three-year midterm strategic plan, targeting an increase of more than 30% in annual sales volumes to 1.3 million vehicles (compared to 2016) and revenues of JPY 2.5 trillion by 2019. Over the three year period, MMC plans to introduce 11 new models and achieve a V-shaped financial recovery. MMC's market expansion plans will focus on ASEAN and China, targeting to increase vehicle sales in ASEAN to 310,000 units (275,000 units in fiscal 2017) and in China to 220,000 units (136,000 units fiscal 2017).
Eclipse Cross launched in Japan In March 2018, in Japan MMC launched its global strategic model, the new Eclipse Cross compact SUV, which will be introduced in 80 countries worldwide (the PHEV variant will be launched by 2020). Also in March 2018 MMC launched its new plug-in hybrid (PHEV) Eupheme SUV that is locally assembled in China under the GAC-Mitsubishi brand (the first PHEV produced by foreign joint venture company in China), and in April started to export its Expander crossover MPV that is assembled at its plant in Indonesia.



Subaru: In fiscal year 2017, 68% of Subaru's global vehicle sales were in North America. By concentrating on sales in the North American market, Subaru has been highly profitable for the past three to four years, but profitability has been increasingly sluggish due to intensifying price competition in the U.S. market.



Subaru's Future Direction and Plans

Three consecutive years of lower operating profit As a result of Subaru's success in developing products tailored to the U.S. market, in 2015 the company recorded an operating income margin of 17.5% and a net income margin of 13.5%. However, due to intensifying competition in the U.S., its primary market, in fiscal year 2017 Subaru's operating income decreased by 7.6% to JPY 3,794 billion as a result of an increase in operating expenses due to factors such as rising interest rates in the U.S., the impact of raw material prices, and increases in the cost of research and development. Also, Subaru's bottom line was negatively impacted with the recall costs associated with uncertified inspections and litigation surrounding the Takata airbag issue.
Strengthening of countermeasures for the U.S. In fiscal year 2018, Subaru will introduce the Ascent, a three-row, 7-passenger SUV exclusively for the North American market as well as models such as the new Forester, to increase its North American sales from the 728,000 units in FY 2017 to 768,000 units. Competition in the U.S. market is expected to further intensify, but Subaru will strictly monitor the management of vehicle production and sales volumes to ensure that inventories remain at the appropriate levels to avoid having to sell at reduced prices. Also, Subaru has made quality a top priority and is taking measures to deal with an increase in vehicle satisfaction complaints due to the rapid increase of production volume at its plant in Indiana.

 

 



Production Forecast by LMC Automotive: Japanese light vehicle production in 2021 will be 8.8 million units

(LMC Automotive, Apr. 2018)

日本のライトビークル生産

According to LMC Automotive's production forecast (April 2018), Japanese light vehicle production in 2021 will be 8.8 million units.
LMC Automotive comments as follows;

"In 2017, Japanese Light Vehicle production increased by 5.1% YoY to 9.25 mn units. This positive result can be attributed to a favorable domestic sales market. The Japanese economy performed better than anticipated last year, which led us to revise most of our monthly domestic sales forecasts upwards during the course of the year."

"For the full‐year 2018, we envisage a slight drop in output in Japan (‐1.4% YoY) to a total of 9.11 mn units, with growth then set to resume in 2019. The government has scheduled another consumption tax hike (from the current 8% to 10%) for 2019 and we expect to see a buying rush in the period leading up the implementation of the new tax."

"Looking further ahead to the years beyond 2020, Japan's unfavorable demographic trends will lead to the start of a gradual decline in Light Vehicle production volumes, to eventually plateau at 8.6‐8.7 mn units. The number of vehicle owners in the country will dwindle, in line with the fast‐aging population and the lack of interest in motoring shown by the younger generation."

"Our export forecast remains largely unchanged, with the long‐term volume seen to hold steady at around 4.5 mn units. At the start of 2018, the yen strengthened to JPY 106 to the US dollar, from JPY 113 in 2017. However, this is not yet high enough to convince Japanese automakers to shift production to markets outside Japan. We expect the domestic brands to stick to their basic rule of sourcing locally, such that we do not envisage any drastic changes in Japanese export levels, given the current economic environment."



Japanese light vehicle production through 2021 (LMC Automotive)

SALES GROUP GLOBAL
MAKE
2015 2016 2017 2018 2019 2020 2021
Total 8,860,289 8,794,211 9,246,900 9,113,826 9,195,114 8,740,473 8,802,624
Toyota Group Toyota 2,706,846 2,818,953 2,896,524 2,766,997 2,750,373 2,535,391 2,565,959
Lexus 542,633 500,452 505,206 543,736 610,097 614,664 667,903
Daihatsu 631,905 576,802 645,980 682,702 629,462 571,010 570,796
Hino 55,423 55,359 62,817 54,313 53,440 52,951 42,993
Scion 28,455 5,504 0 0 0 0 0
sub-total 3,965,262 3,957,070 4,110,527 4,047,748 4,043,372 3,774,016 3,847,651
Renault-Nissan-
Mitsubishi
Nissan 901,802 927,900 1,076,818 1,022,998 1,077,262 1,016,637 1,003,695
Mitsubishi 470,649 441,726 431,461 435,662 432,057 469,516 477,772
Infiniti 128,721 137,040 120,051 114,886 109,710 122,760 124,608
Suzuki 0 0 0 0 0 0 145
sub-total 1,501,172 1,506,666 1,628,330 1,573,546 1,619,029 1,608,913 1,606,220
Honda Group Honda 717,283 816,994 818,442 899,289 1,028,645 918,542 939,922
Acura 2,402 2,033 2,076 2,710 2,148 3,180 3,000
sub-total 719,685 819,027 820,518 901,999 1,030,793 921,722 942,922
Mazda Mazda 975,496 926,234 945,385 959,968 931,373 930,184 884,423
Suzuki Suzuki 815,096 685,588 873,060 846,041 790,050 736,031 739,964
Subaru Subaru 722,717 735,750 719,945 645,832 646,997 636,191 647,852
Isuzu Isuzu 104,885 97,678 95,537 97,438 98,897 97,568 98,008
Daimler Fuso 33,602 29,396 30,800 28,090 26,155 27,603 28,284
Fiat Chrysler Fiat 0 20,277 18,190 10,711 8,390 8,190 7,244
PSA Group Peugeot 8,844 5,643 2,279 1,236 0 0 0
Citroen 13,484 10,831 2,283 1,170 0 0 0
sub-total 22,328 16,474 4,562 2,406 0 0 0
Other UD Trucks 46 51 46 47 58 55 56

Source: LMC Automotive "Global Automotive Sales Forecast (April 2018)"
(Note)1. Data indicates figures of only small-size vehicle, including passenger cars and light commercial vehicles with gross vehicle weight of under 6 ton.
2. All rights reserved. Reproduction of any data will require permission of LMC Automotive.
3. For more information or inquiries of forecast data, please contact LMC Automotive.

 

 



Summary of 2017 financial results and forecasts for 2018

Below is a summary of the data on the financial results for fiscal year 2017 and the business plan forecasts for fiscal year 2018.

  • Seven OEMs' global light vehicle sales
  • Nine Japanese OEMs' sales/Operating income/Net income
  • Nine Japanese OEMs' Operating income margin/Net income margin
  • Foreign exchange rates
  • Nine Japanese OEMs' Capital investment/Depreciation expenses/R&D costs



Seven OEMs' global light vehicle sales

(thousands of units)

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Forecast
Japan Toyota 2,071 2,279 2,365 2,154 2,059 2,274 2,255 2,190
Nissan 655 647 719 623 573 557 584 615
Honda 588 692 818 761 668 668 696 690
Suzuki 596 672 728 756 630 639 668 675
Mazda 206 216 244 225 232 203 210 215
Mitsubishi 152 134 143 115 102 80 98 105
Subaru 172 163 182 163 145 159 163 151
Total 4,440 4,803 5,199 4,797 4,409 4,580 4,674 4,641
North
America
Toyota 1,872 2,469 2,529 2,715 2,839 2,837 2,806 2,800
Nissan 1,404 1,466 1,648 1,829 2,011 2,130 2,091 2,030
Honda 1,323 1,731 1,757 1,750 1,929 1,970 1,902 2,015
Suzuki 32 30 - - - - - -
Mazda 372 372 391 425 438 429 435 457
Mitsubishi 106 85 97 117 135 138 155 184
Subaru 309 390 478 570 630 721 728 768
Total 5,418 6,543 6,900 7,406 7,982 8,225 8,117 8,254
Europe Toyota 798 799 844 859 844 925 968 940
Nissan 713 660 676 755 754 776 756 675
Honda 158 171 169 161 172 184 183 185
Suzuki 223 197 205 195 207 245 281 280
Mazda 183 172 207 229 257 262 269 265
Mitsubishi 218 181 202 227 206 179 193 210
Subaru 55 61 47 47 48 46 48 44
Total 2,348 2,241 2,350 2,473 2,488 2,617 2,698 2,599
Asia & other regions Toyota 2,611 3,324 3,378 3,244 2,939 2,935 2,935 3,020
Nissan 2,073 2,141 2,145 2,111 2,085 2,163 2,339 2,605
Honda 1,039 1,420 1,579 1,695 1,974 2,206 2,418 2,485
Suzuki 1,710 1,761 1,778 1,917 2,024 2,034 2,275 2,344
Mazda 486 475 489 518 607 665 716 725
Mitsubishi 525 587 605 631 605 529 655 751
Subaru 104 110 118 131 134 139 128 137
Total 8,548 9,818 10,092 10,247 10,368 10,671 11,466 12,067
Worldwide Toyota 7,352 8,871 9,116 8,972 8,681 8,971 8,964 8,950
Nissan 4,845 4,914 5,188 5,318 5,423 5,626 5,770 5,925
Honda 3,108 4,014 4,323 4,367 4,743 5,028 5,199 5,375
Suzuki 2,560 2,660 2,711 2,868 2,861 2,918 3,224 3,299
Mazda 1,247 1,235 1,331 1,397 1,534 1,559 1,630 1,662
Mitsubishi 1,001 987 1,047 1,090 1,048 926 1,101 1,250
Subaru 640 724 825 911 958 1,065 1,067 1,100
Total 20,753 23,405 24,541 24,923 25,248 26,093 26,955 27,561

Source: OEMs' Financial Results
Note: Sales volumes for Toyota (including Daihatsu and Hino), Subaru and Isuzu represent consolidated sales volumes, while the data for other automakers reflect retail sales volumes or individual company brand sales volumes. In both cases, the sales volume data was derived from the automaker's consolidated financial results reference materials.



Nine Japanese OEMs' Sales/Operating income/Net income

(in billions of JPY)

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Forecast
Sales Toyota 18,584 22,064 25,692 27,235 28,403 27,597 29,380 29,000
Nissan 9,409 8,737 10,483 11,375 12,190 11,720 11,951 12,000
Honda 7,948 9,878 11,842 13,328 14,601 13,999 15,361 15,600
Suzuki 2,512 2,578 2,938 3,016 3,181 3,170 3,757 3,800
Mazda 2,033 2,205 2,692 3,034 3,407 3,214 3,474 3,550
Mitsubishi 1,807 1,815 2,093 2,181 2,268 1,907 2,192 2,400
Subaru 1,517 1,913 2,408 2,878 3,232 3,326 3,405 3,250
Isuzu 1,400 1,656 1,761 1,879 1,927 1,953 2,070 2,140
Hino 1,315 1,541 1,700 1,685 1,746 1,684 1,838 1,860
Nine OEMs 45,211 50,847 59,910 64,925 69,208 66,886 71,591 71,740
Operating
income
Toyota 356 1,321 2,292 2,751 2,854 1,994 2,400 2,300
Nissan 546 439 498 590 793 742 575 540
Honda 231 545 750 671 503 841 834 700
Suzuki 119 145 188 179 195 267 374 340
Mazda -39 54 182 203 227 126 146 105
Mitsubishi 64 67 123 136 138 5 98 110
Subaru 44 120 327 423 566 411 379 300
Isuzu 97 131 174 171 172 146 167 176
Hino 38 65 112 106 98 71 80 83
Nine OEMs 1,418 2,822 4,535 5,123 5,448 4,532 4,973 4,571
Net
income
Toyota 284 962 1,823 2,173 2,313 1,831 2,494 2,120
Nissan 341 341 389 458 524 664 747 500
Honda 211 367 574 509 345 617 1,059 570
Suzuki 54 80 108 97 117 160 216 205
Mazda -108 34 136 159 134 94 112 80
Mitsubishi 24 38 105 118 73 -199 108 110
Subaru 39 120 207 262 437 282 220 220
Isuzu 91 97 119 117 115 94 106 110
Hino 16 48 89 75 65 49 51 52
Nine OEMs 936 2,039 3,460 3,893 4,056 3,543 5,062 3,915

Source: OEMs' Financial Results



Nine Japanese OEMs' Operating income margin/Net income margin

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Forecast
Operating
income
margin
Toyota 1.9% 6.0% 8.9% 10.1% 10.0% 7.2% 8.2% 7.9%
Nissan 5.8% 5.0% 4.8% 5.2% 6.5% 6.3% 4.8% 4.5%
Honda 2.9% 5.5% 6.3% 5.2% 3.4% 6.0% 5.4% 4.5%
Suzuki 4.7% 5.6% 6.4% 5.9% 6.1% 8.4% 10.0% 8.9%
Mazda -1.9% 2.4% 6.8% 6.7% 6.7% 3.9% 4.2% 3.0%
Mitsubish 3.5% 3.7% 5.9% 6.2% 6.1% 0.3% 4.5% 4.6%
Subaru 2.9% 6.3% 13.6% 14.7% 17.5% 12.4% 11.1% 9.2%
Isuzu 7.0% 7.9% 9.9% 9.1% 8.9% 7.5% 8.1% 8.2%
Hino 2.9% 4.2% 6.6% 6.3% 5.6% 4.2% 4.4% 4.5%
Nine OEMs 3.1% 5.5% 7.6% 7.9% 7.9% 6.8% 6.9% 6.4%
Net
income
margin
Toyota 1.5% 4.4% 7.1% 8.0% 8.1% 6.6% 8.5% 7.3%
Nissan 3.6% 3.9% 3.7% 4.0% 4.3% 5.7% 6.2% 4.2%
Honda 2.7% 3.7% 4.8% 3.8% 2.4% 4.4% 6.9% 3.7%
Suzuki 2.1% 3.1% 3.7% 3.2% 3.7% 5.0% 5.7% 5.4%
Mazda -5.3% 1.6% 5.0% 5.2% 3.9% 2.9% 3.2% 2.3%
Mitsubish 1.3% 2.1% 5.0% 5.4% 3.2% -10.4% 4.9% 4.6%
Subaru 2.5% 6.3% 8.6% 9.1% 13.5% 8.5% 6.5% 6.8%
Isuzu 6.5% 5.8% 6.8% 6.2% 6.0% 4.8% 5.1% 5.1%
Hino 1.2% 3.1% 5.2% 4.4% 3.7% 2.9% 2.8% 2.8%
Nine OEMs 2.1% 4.0% 5.8% 6.0% 5.9% 5.3% 7.1% 5.5%

Source: OEMs' Financial Results



Foreign exchange rates

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Forecast
USD Toyota 79 83 100 110 120 108 111 105
Nissan 79.1 82.9 100.2 109.8 120.2 108.3 110.9 105.0
Honda 79 84 100 110 120 108 111 105
Suzuki 79 83 100 110 120 108 111 105
Mazda 79 83 100 110 120 108 111 107
Mitsubishi 79 82 100 109 121 109 111 105
Subaru 79 82 100 108 121 108 111 105
Isuzu 79 82 98 107 120 109 111 105
Hino 79 82 100 109 120 109 111 105
Average 79.0 82.7 99.8 109.2 120.2 108.4 111.0 105.2
EUR Toyota 109 107 134 139 133 119 130 130
Nissan 109.0 106.8 134.2 138.7 132.6 118.7 129.7 130.0
Honda 108 108 136 139 - - - -
Suzuki 109 107 134 139 133 119 130 130
Mazda 109 107 134 139 133 119 130 130
Mitsubishi 111 105 134 139 133 119 130 130
Subaru 108 106 133 140 133 119 130 130
Average 109.0 106.7 134.2 139.1 132.9 119.0 130.0 130.0

Source: OEMs' Financial Results



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

(in billions of JPY)

FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018
Forecast
Capital
investment
Toyota 707 853 1,001 1,177 1,293 1,212 1,303 1,370
Nissan 406 469 536 463 479 469 485 540
Honda 407 594 726 658 647 541 434 480
Suzuki 127 169 214 195 172 199 213 250
Mazda 78 77 133 131 89 94 104 145
Mitsubishi 71 51 72 68 69 58 100 135
Subaru 54 70 69 111 136 159 141 130
Isuzu 33 58 82 78 98 94 77 91
Hino 43 50 66 69 88 75 58 80
Nine OEMs 1,883 2,341 2,833 2,881 2,982 2,826 2,857 3,141
Depreciation
costs
Toyota 733 727 776 806 885 893 964 1,000
Nissan 334 297 347 373 402 381 384 395
Honda 294 287 346 408 440 438 467 455
Suzuki 103 94 117 134 168 163 151 150
Mazda 69 60 58 69 79 82 87 90
Mitsubishi 53 50 53 53 54 46 52 60
Subaru 54 56 55 65 65 77 90 93
Isuzu 36 36 42 48 56 59 60 62
Hino 44 41 38 38 43 44 51 53
Nine OEMs 1,676 1,606 1,793 1,957 2,149 2,139 2,256 2,305
R&D costs Toyota 780 807 911 1,005 1,056 1,038 1,064 1,080
Nissan 428 458 501 506 532 490 496 540
Honda 520 560 634 663 720 685 731 790
Suzuki 110 119 127 126 131 132 139 160
Mazda 92 90 99 108 117 127 136 143
Mitsubishi 55 60 68 75 79 89 103 122
Subaru 48 49 60 84 102 114 121 120
Isuzu 59 61 67 78 91 91 97 100
Hino 40 43 46 50 61 63 63 67
Nine OEMs 2,091 2,205 2,466 2,643 2,827 2,766 2,887 3,055

Source: OEMs' Financial Results


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Keywords
Japan, Toyota, Nissan, Honda, Suzuki, Mazda, Mitsubishi, Subaru, Isuzu, Hino, U.S. market, China market, Foreign exchange rates

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