Japanese OEMs’ Financial Results: Profit structure improvement, dealing with rising costs
Reactions to semiconductor shortages, Shanghai lockdown, and Ukraine-Russia situation
2022/06/22
- Summary
- Production and sales trends of 7 Japanese passenger car OEMs; Toyota’s revised production plan
- Semiconductor shortage, Shanghai lockdown, Ukraine/Russia situation, and Japanese OEMs' responses
- Impact of soaring material and logistics costs and each OEMs’ response
- Mid- to long-term profit structure improvement and results of the 7 passenger car OEMs
- Sales and operating improved significantly in FY2021, and sales and profits are expected to decrease in FY2022.
Summary
In the fiscal year 2021 financial results of Japanese automakers (Japanese OEMs), the demand for new vehicles was strong in the world's major markets, but the production volume of the seven passenger car manufacturers increased only slightly by 0.6% and the sales volume by 0.2%, to levels several million units lower than their peak volumes before the COVID-19 pandemic.
On the other hand, sales of the nine Japanese OEMs in FY2021 increased 12.6% to JPY 68.1 trillion and operating profit increased 58.5% to JPY 4.8 trillion, partly because Nissan and Mitsubishi Motors reported losses in the previous year. In addition to the curbing of incentives and the effect of the yen's depreciation, each company emphasized that it was successful in its efforts to improve its profit structure, such as lowering their break-even point volumes after the 2008 Lehman Shock and the COVID-19 pandemic.
Regarding the financial outlook for FY2022, although various negative factors remain, global sales volume of the seven passenger car manufacturers is projected to increase by 6.3% to 23.19 million units. However, even after subtracting the effects of cost improvements, material and logistics expenses are expected to be factors that will increase costs totaling nearly JPY 1.8 trillion for the seven passenger car automakers, and they are forecasting an 11.1% increase in sales, but a 10.7% decrease in operating income.
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| Production volumes of the 7 Japanese passenger car manufacturers (Source: Created by MarkLines based on companies’ announcements) |
Sales volumes of the 7 Japanese passenger car manufacturers (Source: Created by MarkLines based on companies’ announcements) |
This report focuses on the factors preventing the Japanese OEMs from expanding production, including shortages of semiconductors and other components, the re-emergence of the COVID-19 pandemic, the lockdowns in Shanghai, China, and the situation in Ukraine and Russia, as well as the impact of rising material and logistics costs and how each Japanese OEM is responding.
Related reports:
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Honda: EV Alliance with Sony, Level 4 Autonomous Driving Trials with GM (Mar. 2022)
Renault-Nissan-Mitsubishi Alliance: Mid-term Plan Progress, Accelerating Electrification (Part 2) (Jan. 2022)
Renault-Nissan-Mitsubishi Alliance: Mid-term Plan Progress, Accelerating Electrification (Part 1) (Dec. 2021)
Suzuki: Intensive R&D of electrification technology by 2025, investing JPY 1 trillion (Dec. 2021)
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Japanese OEMs announce and update policies for electrification and carbon neutrality (Jun. 2021)
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