Japanese Automakers' Global Vehicle Output Rises During June, H1

Japanese automakers have released their production and export data for June and the first half of 2010, showing that they have benefited from the rise in global vehicle demand and a lower base of comparison. During the month and the year to date (YTD), Toyota remained by far the largest producer of vehicles among the Japanese automakers; its global output grew by 15.6% year-on-year (y/y) and 53.0% y/y during the month and the YTD, respectively. Its domestic production was up 18.2% y/y and 55.1% y/y, respectively, during the month and YTD, largely thanks to ongoing "eco-car" incentive schemes and a tax subsidy programme. Its overseas production increased 13.6% y/y and 51.5% y/y, respectively, during the month and YTD, while its exports from Japan rose 15.8% y/y and 57.6% y/y, respectively.

Nissan and Honda retained their positions as the second- and third-largest vehicle producers, respectively, during June and the YTD. Nissan witnessed a 38.8% y/y rise in its global output during the month, marking the highest total for a month in any year. As a result, its global output during the YTD increased 69.0% y/y. Its Japanese production increased 28.6% y/y during the month, while its exports from Japan rose 42.1% y/y, thanks to its Murano, Rouge, X-Trail, and other export models in North America and Europe. Its overseas production recorded its highest ever volumes for any year during June at 253,954 units, up 43.2% y/y. As a result, its overseas production during the first half of 2010 was its highest for any year, coming in at 1.309 million units, up 73.3% y/y. Third-placed Honda witnessed a seventh straight y/y rise in its global output during the month, of 17.7% y/y, meaning that YTD global production was up 36.7% y/y, the first growth for this period in two years. Its domestic production rose for the sixth straight month, by 19.9% y/y, meaning that its first-half production grew for the first time in three years. This was also thanks to a recovery in export volumes, which grew by 23.7% y/y and 1.3% y/y, respectively, during the month and YTD. Its overseas production grew for the eighth straight month during June, by 16.8% y/y. As a result, its overseas production during the first half grew for the first time in two years. Suzuki remained in fourth place during June and the YTD. Its global output grew for the eighth straight month during June, by 27.0% y/y, taking its YTD growth to 25.7% y/y, largely thanks to overseas production growth of 20.9% y/y and 26.0% y/y during the month and YTD, respectively. Its domestic production was up 36.5% y/y in June, taking YTD growth to 25.2% y/y, while exports increased by 70.4% y/y during June, meaning that its YTD exports were up 49.3% y/y.

Similarly, among the smallest Japanese automakers, Mazda's global output rose for the seventh straight month during June, this time by 24.6% y/y, meaning that its YTD production was up 63.7% y/y. This was thanks to an across-the-board rise in exports, domestic production, and overseas output. Mitsubishi also witnessed an eighth straight monthly rise in global production during June, of 59.8% y/y, meaning that its YTD production rose for the first time in three years. Growth during the month and YTD was led by increased exports and domestic production, while growth in overseas output also helped. Its domestic production and exports during the first half of 2010 increased for the first time in two years, while its overseas output during the same period grew for the first time in eight years.

Outlook and Implications

Japanese automakers' global output has been on a growth trend for the last several months, largely thanks to three reasons: the fast recovery in global vehicle demand amid a sustained economic recovery worldwide; intermittent new and revamped model launches by the Japanese automakers in key global markets and emerging markets such as China, Thailand, and India; and the lower base of comparison provided by the data for the same period last year, when Japanese automakers were forced to cut production amid declining global vehicle demand (see Japan: 28 July 2009: Japanese Automakers' Production, Exports Tumble in H1).

The Japanese automakers have certainly benefited from rising demand in the major markets, including North America, Europe, and parts of Asia, while increased domestic demand led by market support measures has also helped automakers boost overall production. Despite the very public global recalls implemented by major Japanese automakers—including Toyota, Nissan, and Honda—the companies are now forecasting a brighter production outlook for 2010. Toyota is already anticipating its domestic production to reach the 3.0 million-unit-level during 2010, while other Japanese automakers including Nissan and Honda are already reportedly speeding up their efforts to raise global production on the back of recent new and revamped fuel-efficient model launches (see Japan: 13 July 2010: Parts Shortage Could Hit Nissan Production; Automaker Launches March Subcompact in Japan and Japan: 9 July 2010: Honda Releases Freed Spike Mini MPV for Sale in Japan). However, the recent labour-management disputes at some of the suppliers of the Japanese automakers in China are likely to hit their global production in the months ahead (see Asia-Pacific: 29 June 2010: Honda's Chinese Production Falls 16% Y/Y in May amid Strike Action, Plans Expansion in Thailand).

Nevertheless, among the other, smaller Japanese automakers, Mazda is optimistic about its 2010 production outlook on the back of increasing demand for its key models, such as the Mazda2 (Demio), Mazda3 (Axela), Mazda6 (Atenza), CX-7, and CX-9, in major markets including Japan, China, and the United States. Mitsubishi is clearly seeing rising demand for its i MiEV electric vehicle (EV), while Fuji Heavy Industries (FHI) is accelerating its efforts to increase global production volumes of its popular models such as the revamped Legacy and Forester on the back of rising demand in major markets including North America and China.

However, the Japanese automakers are likely to be hit by the strengthening of the Japanese yen against other global currencies, and the U.S. dollar in particular, over the coming months and this could hurt their exports and, in turn, domestic production (see Japan: 8 July 2010: Toyota to Extend Product Development Time; JAMA Still "Very Concerned" over Strengthening of Yen). In addition, the Japan Automobile Manufacturers Association (JAMA) recently adopted a cautious outlook for the Japanese automotive industry in light of the after-effects of Europe's sovereign debt crisis (see Japan: 21 May 2010: New JAMA Chairman Cautious over Automotive Industry Outlook in Japan). Nevertheless, IHS Automotive forecasts that output for the full year 2010 will remain well above the 2009 level.