Japanese car sales reverse trend, South Korea strong

Japanese car sales rose by double-digits in October thanks to a low comparison base from last year and South Korean carmakers continued their winning ways with double-digit global sales gains. The bump in Japanese sales may be a one-off gain however, because the carmakers are bracing for the full impact on production cuts resulting from flooding in Thailand that rippled across their global supply chains.
Automobile sales in Japan, excluding 660cc minivehicles, rose 28.3 percent in October from a year earlier, when auto sales tanked on the first full month after government subsidies to replace cars older than 13 years expired. Sales at top-ranked Toyota Motor Corp, excluding the Lexus brand, climbed 20.4 percent, while Nissan Motor Co rose 32.5 percent and Honda Motor Co gained 19.5 percent.
Honda, which has been hit the hardest among Japanese carmakers by the supply disruptions caused by the Thai floods, withdrew its annual earnings guidance on Monday, blaming uncertainty in currency markets and the Thailand disaster. The flooding, along with a persistent strength in the Japanese yen, may further push back the recovery of Japanese carmakers, which have been increasing production following the March 11 earthquake in Japan, analysts say.
"Looking ahead, we can't give firm sales forecasts since we don't yet know how the strong yen and global economic conditions will affect the purchasing and the mindset of consumers, or what impact the production stoppage from the Thai floods will have on domestic sales," said Michiro Saito, a manager at the Japan Automobile Dealers Association.
Hyundai Motor Co's global sales rose 14 percent and sales at its affiliate, Kia Motors Corp were up 11 percent as strong overseas sales offset drops in domestic sales. Hyundai's president, Chung Jin-haeng, told Reuters last week that the Hyundai-Kia duo will be able to top its already-upgraded sales target of 6.5 million units this year and now targets sales of 7 million vehicles.
However, Hyundai warned of rising competition and economic uncertainty after it posted on Thursday a 21 percent rise in quarterly net profit, fuelled by solid sales gains in the United States, Europe and other markets. In India, Maruti Suzuki, the country's top automaker, sold less than half the cars in October as it did a year previously as labour unrest cost it around $500 million in lost production and compounded a demand slowdown in Asia's third-largest economy. Domestic rivals such as Tata Motors and Mahindra & Mahindra have benefited from Maruti's woes, with Tata sales up 5 percent in October and Mahindra sales jumping 20.3 percent.