Japanese Automakers Enjoy Production Growth During February in Face of Global Turmoil

The global economic problems centred on the United States are yet to have a significant impact on Japanese vehicle manufacturers’ overall production figures. The results for February show that growth in production continues unabated, with just isolated cases of output being adjusted.

Domestic Production Strong Despite Weak Market

Total domestic production for the month reached 1,050,731 units, 14.3% above January’s output. Of this figure, exports totalled 559,789 units, representing 53.3% of total domestic production, down from January’s figure of 59.4%.

Year-on-year (y/y) comparisons for the month reveal that industry leader Toyota recorded solid growth in exports of 7.0%, which then contributed to a 6.1% increase in domestic production. This was the second consecutive month of domestic output growth for Toyota and its highest February on record, despite the fact that Japanese passenger car sales fell by 1.7% y/y during the month. Toyota exported 58.7% of its domestic production, the fifth successive month of growth, mainly thanks to sales opportunities in Asia, the Middle East, and Oceania. Daihatsu experienced solid demand in Asia.

Although Nissan is well behind Toyota in volume terms, its rate of growth in domestic production during February put all its rivals in the shade. The 27.6% y/y expansion during the month has been attributed to the X-Trail, Rogue, and Infiniti EX models, while the transfer of Qashqai/Dualis production to Japan will also have made a significant impact. Exports, accounting for 53.4% of domestic output in February, were supported by a 26.1% increase in sales to the U.S. market, amounting to 28,648 units, and a 47.0% increase in sales to Europe, amounting to 8,720 units.

Honda suffered a substantial fall in domestic production, for the sixth month in succession, as the company shifts more output overseas. Exports took a particular hit, mainly because of a fall in sales to Europe of 69.2% y/y to 3,095 units. However, exports to the U.S. market grew by 9.4% y/y to 31,277 units. Suzuki suffered a similar drop in domestic output as it too turns its attention to overseas plants.

Mitsubishi meanwhile recorded its 16th month of export growth and a record for the month since it began its recovery in 2003. The Lancer has found new sales opportunities in Russia, North America, the Middle East, and Africa, shipments to those regions having risen by 37.6% y/y in February. Exports of the new Outlander rose 36.1% y/y, mainly thanks to sales in Europe and China. Fuji Heavy, under the Subaru brand, posted similar increases as the new Impreza begins to make an impact.

Overseas Output Also Up Y/Y

Output at Japanese companies’ overseas plants reached 1,000,615 units in February, representing 48.8% of the manufacturers’ global total. This was down 2.1% from the month before.

On a y/y basis, the February overseas production figures reveal some significant improvements. Toyota has now enjoyed 74 months of unremitting progress, with all regions reporting positive results. Honda made up for its losses at home to record production growth in all its foreign regions, most notably the United States, where output grew by 12.7% y/y to 90,438 units. Its production in China was also up, growing 30.1% y/y to 33,039 units. Nissan’s overseas output results were more mixed, with U.S. production falling 4.2% y/y to 55,703 units and Mexican output dropping 17.7% y/y to 33,239 units. However, production grew by 38.0% y/y in the United Kingdom despite the transfer of Dualis/Qashqai production to Japan.

Outlook and Implications

The resilience of Japanese manufacturers is remarkable as the global economic problems continue to unravel. The main producers have diversified away much of the risk with their broad product ranges and wide spread of production locations. Toyota has suffered falling sales for its light-truck lines, but increased consumer interest in its other models has maintained overall production growth. Honda is clearly benefiting from the greater demand for more fuel-efficient vehicles, and by serving the increase in overseas demand from local production sites it will also avoid the worst effects of the fall in the value of the U.S. dollar.

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