Chip shortage top of mind as Japanese automakers ready to report lower profits
As Japan’s biggest automakers report what analysts expect to be depressed earnings this week, investors looking for business clues will be listening to any assessment of the future impact of a shortage. world of chips which caused a disruption in production.
TOKYO: As Japan’s biggest automakers report what analysts expect to be depressed earnings this week, investors looking for trading clues will be listening to any assessment of the future impact of ‘a global shortage of chips which has caused a disruption in production.
Automakers around the world have had to adjust or suspend production in recent months, as factors such as increased demand for electronic devices and U.S. sanctions against Chinese tech companies have resulted in a shortage of semi. conductors.
Power outages in Texas where a number of chipmakers have factories and a fire at Renesas Electronics Corp’s chip factory in Japan have exacerbated the supply crunch.
“The big question will be to what extent automakers lower their earnings forecasts as a result of slowing production and therefore lower sales,” said analyst Julie Boote of Pelham Smithers Associates.
“What should be an otherwise strong (post-pandemic) recovery year could be somewhat mitigated by the difficult supply situation.
Still, tighter supply but robust auto demand is pushing up vehicle prices, especially in the United States, providing a buffer to automaker profits, analysts said.
For the fiscal year ended March 31, Toyota Motor Corp – the world’s largest automaker by vehicle sales last year – is expected to report a 12.5% drop in operating profit to 2.1 trillion yen (US $ 19.30 billion), showed Refinitiv SmartEstimate based on 24 analysts. estimates.
Profit is expected to rebound to 2.6 trillion yen in the current fiscal year that began April 1, Refinitiv SmartEstimate showed.
While many global competitors have been forced to cut production due to the chip shortage, Toyota has so far been largely unscathed, likely due to its chip storage policy, analysts said.
Honda Motor Co Ltd will likely report an 11% drop in profits to 560 billion yen, while Nissan Motor Co Ltd is expected to report a loss of 142 billion yen, beating a loss of 40.5 billion yen a year earlier. showed Refinitiv SmartEstimate.
Honda’s profit is expected to reach 791 billion yen in the current fiscal year, and Nissan is expected to reach profit of 141 billion yen, according to Refinitiv SmartEstimate.
Nissan is expected to release its results on Tuesday, followed by Toyota on Wednesday and Honda on Friday.
(Reporting by Eimi Yamamitsu; Editing by Miyoung Kim and Christopher Cushing)