Q2 results: Honda and Nissan have higher days ahead


The fall of the yen against the dollar increases the value of wages repatriated to Japan, fueling the huge profits of domestic car makers. The currency has lost 28 percent of its value against the dollar since January 1, falling to its lowest level in three decades against the dollar.

Due to the weakening yen, Honda is currently forecasting higher operating profit and net profit than previously forecast. Operating profit for the full fiscal year is expected to be broadly equal to last year’s figure of 870 billion yen ($ 6.02 billion). Net income is projected to increase by 2.5 percent to 725 billion yen ($ 5.01 billion) compared to the previous year.

Meanwhile, Nissan saw operating profit grow 45 percent to 91.7 billion yen ($ 634.6 million) in the July-September period. This result delivered a profit margin of 3.6 percent, down from 3.3 percent a year earlier, bringing Japan’s number 3 carmaker closer to hitting the 5 percent medium-term target.

Even in the face of declining vehicle sales, Nissan said higher per-vehicle revenues and better prices helped boost profitability as the company continued its drive to recover.

Announcing the results on Wednesday, November 9, Chief Operating Officer Ashwani Gupta said Nissan has attracted higher levels of customers in North America, thanks in part to product renewals and lower incentives. The Spiffs have dropped to close to the industry average, and Nissan cars are packed with more expensive technology.

“The customer pays for it,” said Gupta. “Our brand’s strength is growing.”

Products such as the Ariya electric crossover, the Z sports car and the Rogue crossover have helped to enhance the brand image and win better customers and better prices. “The mix has improved a lot,” said CFO Stephen Ma. “Customers have responded very well to all our new products.”

Nissan also improved its profit forecast for the fiscal year with an improved model range and a currency tailwind that added about half a billion dollars to its quarterly operating profit.

Operating profit is now growing 46 percent to 360 billion yen ($ 2.49 billion) compared with the previous fiscal year. The revised net income projections are also better than previously reported, but still represent a 28% decrease from the previous fiscal year.

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