Japanese carmakers Nissan and Honda have raised their profit and revenue expectations for the current fiscal years, helped by strong sales worldwide. The cheaper yen is also boosting results.
The groups both warn that intense price competition in China poses challenges. “Excessive price competition continues in the Chinese market, with new car manufacturers entering the market,” said Makoto Uchida, Nissan’s chief executive.
On the other hand, the Japanese yen has fallen sharply in recent months. The Bank of Japan is sticking to a loose monetary policy to stimulate the economy. A cheaper yen is good for Japanese exporters because it makes their products cheaper abroad.
Honda now expects profit in its fiscal year, which runs until the end of March, to be 930 billion yen. The company previously estimated 800 billion yen. Turnover also increased considerably. Nissan raised its profit forecast by 50 billion yen to 390 billion yen for the same period.
Nissan projects that strong sales in North America, Europe and Japan will likely offset China’s decline. “Our performance in the first six months rebounded tremendously,” Uchida said.
Japanese automakers have lost market share in key markets in recent years due to slow introductions of new fully electric models. For a long time, the Japanese have only been concerned with developing hybrid cars with an electric motor and a combustion engine.