While Japan’s biggest automakers report what analysts expect to be depressed earnings this week, investors looking for trading cues will be tuned into any assessment of the future impact of a global chip shortage that has forced a shake-up in production.
Automakers worldwide have had to adjust or suspend production in the past few months as factors including a surge in demand for electronic devices plus US sanctions against Chinese technology firms led to a dearth of semiconductors.
Blackouts in Texas where a number of chipmakers have factories and a fire at Renesas Electronics Corp’s chip plant in Japan have exacerbated the supply crunch.
“The big question will be by how much automakers reduce earnings forecasts due to the slowdown in production and, consequently, lower sales,” said analyst Julie Boote at Pelham Smithers Associates.
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“What should be an otherwise strong (post-pandemic) recovery year could be somewhat dampened by the supply predicament.”
Still, tighter supplies yet robust auto demand is pushing up vehicle prices, particularly in the US, providing a buffer to automakers’ earnings, analysts said.
Toyota largely unscathed
For the year ended March 31, Toyota Motor Corp — the world’s largest automaker by vehicle sales last year — is set to report a 12.5 per cent drop in operating profit at 2.1 trillion yen ($19.30 billion), showed Refinitiv Smart Estimate based on 24 analyst estimates.
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Profit is likely to rebound to 2.6 trillion yen in the current fiscal year started April 1, Refinitiv Smart Estimate showed.
While many global rivals were forced to slash production due to the chip shortage, Toyota has so far been largely unscathed, likely due to its chip stockpiling policy, analysts said.
Honda Motor Co Ltd will likely report an 11 per cent fall in profit at 560 billion yen, while Nissan Motor Co Ltd is set to report a loss of 142 billion yen, widening from a 40.5-billion-yen loss a year prior, Refinitiv Smart Estimate showed.
Honda’s profit is likely to reach 791 billion yen in the current business year, and Nissan is likely to swing to a profit of 141 billion yen, according to Refinitiv Smart Estimate.
Nissan is scheduled to report earnings on Tuesday, followed by Toyota on Wednesday and Honda on Friday.