Global Insight Perspective | |
Significance | Japan's major carmakers posted record combined global production figures in 2006, with Honda overtaking Nissan to become Japan's second-biggest carmaker in terms of combined global production volumes. Toyota also posted record global production growth of 10% to 8,093,162 units. |
Implications | Honda set a global production record of 3,633,813 units in 2006 as a result of strong sales of the Civic C-segment hatchback and high demand for the manufacturer’s minivehicles in the otherwise sluggish domestic market. Meanwhile, Nissan experienced a 7.7% slump in combined production to 3,238,346 million units as a result of an ageing model line-up. |
Outlook | Toyota and Honda's 2006 performances came on the back of strong sales in the United States and wider Asian markets, and were achieved despite a highly stagnant domestic market. Both Toyota and Honda are in strong positions, with the former looking set to surpass GM as the world's number-one light vehicle manufacturer in 2007 |
Record Production for Toyota in 2006
Toyota maintained its unassailable position as Japan's number-one carmaker in terms of production volume in 2006 after recording combined global output of 8.91 million units in group terms when subsidiary Daihatsu is included. According to the manufacturer's own figures, this places Toyota just a few thousand units behind General Motors (GM) in terms of full-year light vehicle production. However, with the U.S. auto giant implementing a large-scale rationalisation programme, which includes plant closures and up to 30,000 job losses, GM's production is set to fall in 2007, while Toyota's output will continue to expand. This means that, according to both GM's and Toyota's own data, the Japanese carmaker will become the world's number-one manufacturer in 2007. When taken in isolation, the production of Toyota-branded cars rose by 10% year-on-year (y/y) in 2006 to 8,093,162 units.
Honda Overtakes Nissan
Behind Japan's leading car-maker there was a significant development as Honda overtook Nissan for the first time to become the country's second-largest volume carmaker with production of 3,633,813 units in 2006, an increase of 6.6% y/y. By way of contrast, Nissan's global production fell by 7.7% y/y to 3,238,346 million units, largely as a result of falling demand in the United States due to a lack of new model releases during the year as the company gears up for a major new model launch programme in 2007. Honda, on the other hand, experienced its 10th consecutive year of production volume growth, as the company's export volumes from its Japanese production facilities rose by 20.1% to 627,952 units as a result of strong sales of the latest generation of the C-RV sports-utility vehicle (SUV) and the Fit (Jazz) B-segment car. Honda also recorded some big gains in its other Asian production units towards the end of 2006, setting a new monthly record in December for overseas production, as well as for production in Asia and China. For the whole of 2006, Asia (excluding Japan) as a region built 635,833 units, a rise of 18.7% y/y, and even more impressively there was a 32% increase in Chinese production to 352,551 units.
Japanese Carmakers’ Combined Global Production Volumes for 2006 | ||
Manufacturer | Units | % Increase/Decrease |
Toyota | 8,093,162 | +10.0 |
Honda | 3,633,813 | +6.6 |
Nissan | 3,238,346 | -7.7 |
Suzuki | 2,342,192 | -10.2 |
Mitsubishi | 1,313,076 | -3.6 |
Mazda | 1,285,320 | +12.1 |
Daihatsu | 824,502 | +6.5 |
Fuji Heavy | 592,656 | +0.7 |
Source: Manufacturers' data | ||
Suzuki Benefitsfrom Rise in Minivehicle Market
Japan's fourth-largest carmaker by production volume in 2006 was small-car specialist Suzuki. The company was well placed to benefit from the rise in the domestic minivehicle market in 2006. A significant contribution was made to Suzuki's global production volumes by the company's Indian unit Maruti, which continues to dominate in that country with about half of India's combined passenger car market; Maruti's sales volumes grew by 14.4% in 2006 to 541,365 units.
Outlook and Implications
Japan's major light vehicle and passenger car manufacturers remained in robust shape in 2006 despite some challenging operating conditions in the global market. Toyota's immense strength saw the company's main brand record double-digit percentage growth in production on the back of strong sales growth in the United States and the wider Asian markets. According to Toyota's own production figures, the company was extremely close to surpassing GM as the world's number-one carmaker in 2006 in terms of production volume, and this transition will undoubtedly occur during 2007. Japan's new number-two carmaker, Honda, also enjoyed robust global production growth of 6.6%. This was underpinned by a number of factors, not least strong demand for the company's main C-segment hatchback, the Civic, which performed particularly well in the United States and Europe, where its futuristic styling has been well received. Although Nissan suffered a poor year by its own impressive recent standards, with its global production levels falling 7.7% in 2006, the company is set to receive a big boost throughout 2007 with nine separate new model lines due for launch in global markets during the year. This should see production volumes at the very least return to 2005 levels. Sales of the Qashqai cross-utility vehicle (CUV) will begin in Europe next month, and the new Skyline has already been launched in Japan. The resources that the Japanese carmakers pour into research and development (R&D), especially in the case of Toyota and Honda, should ensure that they continue to lead the way in the field of vehicle technology and, perhaps most importantly, hybrid and other alternative powertrains.