As the earning season has concluded, investors are taking stock about the auto sector’s FY24 Q2 results and updated guidance numbers. Analyst Julie Boote reviews the key developments in the industry, and how these could affect automakers’ earnings in the second half of the fiscal year.
With details of the provisions given, Hino has riased its full-year FY24 sales and OP guidance, mainly due to a better-than-expected performance in Japan / Toyota sales and lower than previously predicted fixed costs. However, Julie Boote cautions that while the trend is improving, it is unlikely that Hino will be in a position to pay out any dividends this year or next.
Toyota Motor (7203 JT) is likely to report a profit decline in FY24 Q2, as high expenses are set to more than offset moderate positive contributions from vol/mix/price and the currency. However, since this OP decline is anticipated (as per consensus numbers), the key focus should be on Toyota’s FY24 guidance: we view the automaker’s profit forecasts as conservative, leaving room for an upgrade.
Given that the EV market is not a free market, led by demand and supply, but a distorted market, moved by political intervention in the form of subsidies (or lack of), making EV sales forecasts is very challenging indeed. This is a headache for analysts, but even more so for auto companies with a ten-year planning horizon. In this report, we outline the sales situation for different regions, as well as providing an outlook based on currently available information.
When the BoJ raised rates in March, it had been 17 years since it had last done so, though the world was very different then. While the July rate hike was unlikely to move the economic needle, the question now is what else might follow the subsequent financial market maelstrom. Pelham Smithers discusses the outlook for Japan’s macro environment, what new fiscal policies the new PM might introduce, how the BoJ might react and the all-important trend in corporate earnings. This then leads us to...
As the emission data manipulation case is dragging into its fourth year, Hino’s earnings outlook for FY24 remains weak. Sales restrictions in Japan and poor market conditions in Asia are limiting Hino’s sales growth, and high costs are weighing on profitability. But is there an upside? Analyst Julie Boote investigates.
Rivals Nissan and Honda surprised markets with the announcement of a future collaboration on EVs and software. While it is still early days, the two companies seem keen to take advantage of scale and synergies in the highly competitive EV space. Given the industry’s rapid transition towards new mobility, analyst Julie Boote investigates whether a more comprehensive alliance or a merger could be possible and beneficial.
ASEAN has long been considered one of the global auto markets with the best growth prospects, but expectations have not been met. With China in trouble and ASEAN auto sales lacklustre, Japanese automakers need to review their positioning in Asia. Analyst Julie Boote provides a short-term outlook for the ASEAN auto market, and discusses Japanese assemblers’ options within this context.
Toyota Motor impressed markets with excellent results in the last three quarters, heading towards record sales and profits in FY23. The share price rally so far this year is evidence of investors’ recognition of the company’s successful hybrid strategy. Therefore, Toyota is not only benefiting from strong earnings growth, but from a complete reassessment of how the automaker will fare in a new mobility world.
In our 2010 Japan Perspective, written close to the nadir of the bear market, we discussed what was wrong with Japan, but also what it was starting to do right. Fourteen years on, the Nikkei 225 - though not yet Topix - has hit a new all-time high. This report looks at how Japan built on those things that were going right, while also starting to address what else needed to be done, and looks at whether more is needed to be done if the market rally is to continue from here.
Once again topping expectations, Toyota produced excellent FY23 Q3 results, thanks to the triple benefits of strong volume growth, firm pricing and currency gains. Despite Daihatsu related losses to be booked in Q4, Toyota is now heading for an all-time record year for both sales and profits. However, analyst Julie Boote cautions that deteriorating market conditions could be reflected in more subdued guidance numbers for FY24.
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