Mazda Motor Corp. (7291) and Fuji Heavy Industries Ltd. (7270) climbed in Tokyo trading after the automakers, which have the Japanese industry’s highest ratio of domestic production, benefit from a weakening yen.
Mazda soared 12 percent, the biggest gain in four years, to 317 yen at the close of trading in Tokyo. Fuji Heavy rose 1.4 percent to a record 1,390 yen. The benchmark Nikkei 225 Stock Average fell 0.9 percent.
The two automakers join Toyota Motor Corp. (7203) in raising their profit projections as the weakening yen makes Japanese products more profitable overseas. Japan’s exporters are benefiting as the currency touches a 2 1/2 year low as Prime Minister Shinzo Abe pushes for monetary easing to end deflation.
“The currency has the biggest impact,” said Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees about $38 billion. “At the current level, we can expect earnings in the fourth-quarter to greatly outperform, and for earnings to the next fiscal year to exceed expectations as well.”
Mazda (7261), with the second-biggest percentage gain on the Nikkei 225 Stock Average in the past 12 months, more than doubled its net income forecast to 26 billion yen ($278 million) in the year ending March, it said yesterday in a statement. Fuji Heavy, with a 174 percent climb that’s the biggest on the benchmark Nikkei in the past year, raised its estimate by 13 percent to 76 billion yen.
Fuji Heavy, which makes Subaru cars, delivered a record number of vehicles in the U.S. last year, led by the Impreza hatchback. The Tokyo-based automaker and Mazda manufactured 75 percent and 71 percent of their vehicles in Japan, the highest ratio among the country’s major automakers, according to data compiled by Bloomberg.
The yen has weakened about 14 percent against the dollar the past three months, the biggest decline among 10 developed-nation currencies tracked by Bloomberg.
The Subaru maker said it expects to sell 722,000 vehicles for the full year, an increase of 8,000 units from its previous forecast. The automaker yesterday also raised its projections for operating income and revenue. The projections are based on currency assumptions at 82 yen to the dollar and 105 yen to the euro, according to the statement.
“The yen is still making corrections from a high level,” Fuji Heavy Chief Financial Officer Mitsuru Takahashi said in a briefing in Tokyo yesterday. “From a manufacturer’s point of view, we should produce where the goods are sold.”
The automaker didn’t provide an update on its plan to expand production capacity in the U.S. to meet rising demand.
In the U.S., deliveries will rise an estimated 8.5 percent to 365,000 cars this year, outstripping the capacity of Fuji Heavy’s current plant in Lafayette, Indiana. The automaker increased sales 26 percent to 336,441 last year. The factory can produce a maximum of 310,000 vehicles annually, based on state air-pollution limits, Jennifer McGarvey, a spokeswoman for the factory, said in December.
Fuji Heavy was the best performer on the Nikkei 225 Stock Average (NKY) last year, more than doubling as the automaker’s lack of manufacturing plants in China gave it flexibility to ship more cars to the U.S. and Japan.
At Mazda, which exported about 80 percent of the cars it made in Japan last year, the increase in profit forecast also reflects demand for fuel efficient vehicles such as the CX-5 sport utility vehicle and Mazda6 sedan and wagon, according to the Hiroshima, Japan-based company.
“They have a really big sensitivity from one yen change, so the weakening of the yen will be purely positive for Mazda,” said Kota Yuzawa, an auto analyst at Goldman Sachs Group Inc. in Tokyo.
The automaker revised its outlook for the yen against the dollar to 81 from 80, and 104 from 100 versus the euro.
Mazda is seeking alliances with other carmakers in product development and production to boost its lineup and increase utilization of plants.
It will build a sub-compact based on the Mazda2 for Toyota Motor Corp. at a Mexico plant currently under construction. Production of the vehicle will begin in mid-2015 at a rate of 50,000 units per year, the companies said in November. The agreement will help Toyota strengthen its lineup in North America and increase production efficiency at Mazda, the companies said at the time.
The carmaker will also produce with Fiat SpA (F) a new Alfa Romeo roadster that will be based on the next-generation Mazda MX-5, at its factory in Hiroshima from 2015, the companies said last month.
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