Japanese Carmakers Stage Stellar Comeback

Japanese Carmakers Stage Stellar Comeback
Japanese carmakers are regaining their competitiveness despite a series of recent blows. In the face of global recalls and the record strength of the yen, Japanese carmakers saw sales and operating profits jump in the first half of this year. First-half performance figures by Japan's big three announced last week show Toyota's sales rising 15.5 percent from a year ago to 9.68 trillion yen. Japanese automakers settle their accounts in March, so the first half is the period between April and September. Toyota posted an operating profit of 323.1 billion yen, compared to a 136.9 billion yen operating loss a year ago. Toyota suffered heavy losses in the global financial crisis that started in the U.S., compounded by surplus production facilities, inventory build-up and the recall of 10 million vehicles. Japanese carmakers also saw their price edge erode as the yen strengthened to 96 per dollar in the first half of last year and to 89 in the first half of this year. Honda's first-half sales rose 13.7 percent from the same period last year, while operating profit soared a whopping 339 percent to 397.9 billion yen. Honda managed to achieve a profit last year and is recovering pre-crisis performance levels. But it was Nissan, long seen as the weakest among Japan's big three, that posted the largest sales increase at 28 percent, with operating profit surging 253 percent to 334 billion yen. During the same period, Korea's Hyundai-Kia Automotive Group posted its largest-ever operating profit at W2.46 trillion (US$1=W1,108), pulling off massive profits on its home turf, where it controls 80 percent of the market, and benefiting from the decreased price competitiveness of its Japanese rivals.

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