Toyota, Honda Post U.S. Sales Gains Before Japan Earthquake Cut Production
Toyota, Honda Post U.S. Gains Ahead of Japan Quake Effect
Jin Lee/Bloomberg
A Toyota Motor Corp. Scion FR-S concept sports coupe sits on display at the New York International Auto Show.
A Toyota Motor Corp. Scion FR-S concept sports coupe sits on display at the New York International Auto Show. Photographer: Jin Lee/Bloomberg
May 4 (Bloomberg) -- Vivek Vaidya, automotive and transportation director at research company Frost & Sullivan, talks about the global auto industry. General Motors Co., less than two years after declaring bankruptcy, is poised to reclaim the global auto sales lead this year from Toyota Motor Corp., Japan's automaker rattled by natural disasters and reports of slipping quality. Vaidya speaks from Singapore with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
May 3 (Bloomberg) -- Scott Painter, chief executive officer of TrueCar.com, an automotive-sales data-marketing company, talks about U.S. auto sales in April and the outlok for the industry. He speaks with Matt Miller and Carol Massar on Bloomberg Television's "Street Smart." (Source: Bloomberg)
May 3 (Bloomberg) -- David Cole, chairman of AutoHarvest and chairman emeritus of the Center for Automotive Research, discusses the outlook for the automobile industry. He speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)
May 3 (Bloomberg) -- Jeremy Anwyl, chief executive officer of Edmunds.com, talks about the outlook for U.S. auto sales in April and the next few months of the year. He speaks with Margaret Brennan on Bloomberg Television's "InBusiness." (Source: Bloomberg)
Toyota Motor Corp. (7203) and Honda Motor Co., the automakers hardest hit by Japan’s record earthquake, managed U.S. sales gains in April that may be their last for a few months.
The increases, reported yesterday, trailed the industrywide surge of 18 percent from a year earlier. Sales rose 1.3 percent at Toyota, Japan’s largest carmaker, and 9.8 percent at Tokyo- based Honda. Nissan Motor Co. posted a 12 percent gain, and Hyundai Motor Co. (005380) said its sales jumped 40 percent.
“The fact Toyota was essentially only flat in April is an indication of what’s to come,” said Jesse Toprak, vice president of industry trends at TrueCar.com in Santa Monica, California, a website that tracks sales and price trends. “In terms of the supply situation, this is only the beginning.”
Japan’s March 11 quake and tsunami hobbled assembly work at Toyota and Honda, with both estimating they won’t fully restore worldwide production until this year’s fourth quarter. While most global automakers reported some effect on operations from disruptions at Japan-based parts suppliers, the output reductions for Toyota and Honda have been the steepest and left them unable to meet rebounding U.S. demand.
Industrywide April sales rose to 1.16 million cars and light trucks from 982,134 a year earlier, according to Autodata Corp. U.S. consumer confidence rose more than forecast in April, signaling that six straight months of job growth are helping Americans endure the highest fuel prices in almost three years.
Job Growth
Toyota’s American depositary receipts, each representing two ordinary shares, fell 47 cents to $79.69 yesterday in New York Stock Exchange composite trading. Honda’s ADRs, each representing one ordinary share, fell 47 cents to $38.67 in New York. Markets in Tokyo are closed today for a national holiday.
Hyundai fell 1,500 won, or 0.6 percent, to 240,500 won at 10:35 a.m. in Seoul trading.
U.S. sales for Japanese and South Korean auto brands rose 14 percent to 520,306 vehicles. Their combined market share fell to about 45 percent from 47 percent a year earlier as they failed to keep pace with the industry’s April U.S. sales increase.
Among U.S.-based automakers, sales rose 26 percent for General Motors Co. (GM), 13 percent for Ford Motor Co. (F) and 22 percent for Chrysler Group LLC. In part because of the earthquake, GM is poised this year to reclaim the title of world’s biggest automaker from Toyota, which has held the crown since 2008.
‘Double Hit’
Regular unleaded gasoline rose 37 percent in the past year to $3.97 a gallon as of May 2, according to the American Automobile Association. The peak was $4.11 in July 2008.
Toyota and Honda are unable to take full advantage of rising demand for the types of fuel-efficient models that consumers associate with the two companies, Toprak said.
“They’re getting a double hit,” he said. “We have a recovery in overall demand that they’re missing out on, and demand, particularly for very efficient models, is rising and they don’t have inventory.”
Randy Pflughaupt, a group vice president for Toyota’s U.S. unit, said on a conference call yesterday that it’s “somewhat of a reality” that the Toyota City, Japan-based carmaker faces limited vehicle supplies in May, June and July.
Limited Inventory
“While our current dealer supply of vehicles remains adequate, we know that production constraints may start to affect sales into the summer months,” John Mendel, Honda’s U.S. executive vice president, said in a statement.
Toyota sold 159,540 Toyota, Lexus and Scion models in April, up from 157,439 a year earlier. Camry sedan sales rose 9.1 percent, while shrinking inventory led to a 0.6 percent decline for Prius hybrids. Corolla, the best-selling small car, also had a decrease, which Pflughaupt blamed on limited supply.
“We’re feeling the crimp in some sense already,” he said.
Bob Carter, Toyota’s group vice president for U.S. sales, said the company’s 47-day supply of vehicles at the start of May varies by model. Prius has a less than 10-day supply.
At the start of the year, Toyota anticipated boosting U.S. sales by 10 percent or more. Following the earthquake and its disruption of operations, the company isn’t able to estimate annual deliveries, Carter said.
Small Cars, Hybrids
Because of its limited supply of vehicles, Toyota this month has trimmed incentives, dropping no-interest loan offers, limiting 1.9 percent loans to only a few models and providing a cash discount solely on Tundra large pickups, Carter said.
Toyota’s 1.3 percent sales gain compares with an average estimate of a 1.4 percent increase by analysts surveyed by Bloomberg. The company’s U.S. market share for April tumbled 2.2 percentage points from a year earlier to 13.8 percent, according to Woodcliff Lake, New Jersey-based Autodata.
Honda sold 124,799 Honda and Acura vehicles, rising from 113,697. Models with gains included Civic small cars, CR-V compact sport-utility vehicles, and Insight and CR-Z hybrids.
The company this week said supplies of the 2012 Civic line that went on sale in late April probably would be limited during the next few months as it works to restore inventories of parts affected by the earthquake.
Honda’s 9.8 percent sales gain was less than a 14 percent increase, the average estimate of analysts surveyed by Bloomberg. Its U.S. market share was about 11 percent, a decline from about 12 percent in April 2010, Autodata said.
Opportunity for Nissan
Nissan sold 71,526 Nissan and Infiniti autos in April, up from 63,769 a year earlier. The Yokohama, Japan-based company’s gains came from Sentra small cars, Altima sedans and Juke compact crossovers.
Nissan canceled some North American production since the March quake and expects operations to return to normal levels by late May or early June, said David Reuter, a company spokesman.
Given the situation at Toyota and Honda, “I smell market- share gains,” Al Castignetti, vice president of U.S. Nissan- brand sales, said in an interview. “It’s obviously an opportunity for us.”
Nissan’s 12 percent sales gain missed the average estimate of analysts surveyed by Bloomberg of a 33 percent increase. Nissan’s market share was 6.2 percent last month, compared with 6.5 percent a year earlier, according to Autodata.
Separately, Nissan yesterday was chosen to supply New York’s next fleet of yellow taxi cabs, a deal city officials valued at $1 billion over 10 years.
Nissan beat out proposals from two other finalists in the “Taxi of Tomorrow” competition: Ford and Karsan Otomotiv Sanayi & Ticaret AS of Turkey. Nissan’s NV200 minivan will become the new standard, eventually replacing the city’s 13,237- car fleet, which now consists of 16 models.
Hyundai, Kia
Hyundai, based in Seoul, sold 61,754 cars and trucks, an April record and up from 44,023 a year earlier. The increase was led by deliveries of the revamped Elantra small car and the Sonata sedan. The automaker’s market share rose 0.8 percentage point to 5.3 percent.
Kia Motors Corp. (000270), Hyundai’s Seoul-based affiliate, boosted April sales 57 percent to 47,074 vehicles, a record for any month, on increases for Optima sedans and Forte small cars. Kia gained 1 percentage point of market share, to 4.1 percent.
The South Korean automakers, which operate separately, sold a combined 108,828 vehicles last month, a record.
Hyundai, Kia, Nissan, Ford, GM and Volkswagen AG all may benefit from tight supplies at Toyota and Honda, Toprak said.
Subaru, the auto brand of Japan’s Fuji Heavy Industries Ltd. (7270), said deliveries grew 6.7 percent. Mazda Motor Corp. (7261) raised sales 9 percent, and Mitsubishi Motors Corp. (7211) and Suzuki Motor Corp. (7269) had respective gains of 106 percent and 9.3 percent.
To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net
To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net
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