Japan's top automakers will report weak first-quarter results hit by a stronger yen and production cutbacks, but most expect a steady improvement in coming quarters helped partly by government programmes to encourage car purchases and progress in cost-cutting.
Toyota Motor Corp, Honda Motor Co, Nissan Motor Co and Mazda Motor Corp are all expected to swing to a loss for April-June as they sold many vehicles from inventory, keeping factories severely underused.
But the financial first quarter is seen marking a big improvement from January-March, and many automakers have flagged further output increases in the coming months by bringing back idled shifts, adding overtime and hiring back contract workers.
"Inventory adjustments appear to be nearing an end, and it looks like production volumes will continue to improve," JPMorgan Securities analyst Kohei Takahashi said, referring to the main North American market.
Suzuki Motor Corp is expected to be alone among Japan's top five carmakers in eking out a quarterly profit thanks to brisk sales in India, its biggest market, and successful cost-cutting measures.
While most industry executives say they do not expect vehicle sales to fall any further, few have yet called a recovery in the major markets of North America, Europe and Japan -- an uncertainty that analysts say will likely keep top automakers from raising their full-year forecasts.
China is a rare bright spot, offsetting part of the sales slide in the United States, Europe and Japan. Nissan has performed particularly well thanks to the introduction of lower taxes on cars with engines smaller than 1.6 litres. In the first half of 2009, Nissan sold more vehicles in China than in Japan.
Full story
