Breaking News: Japanese car brands are alive and well in the U.S.

Newly assembled 2013 Ford Escapes sit on plant lots ready to be shipped out to dealers at the newly transformed Louisville Assembly Plant in LouisvilleSo Japanese brands are back in the U.S. auto market. I wasn’t aware they ever left.

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Japanese brands gained during crisis, but overall have been stable.

Sure, the past two years have given us production upsets from a tsunami, the Tsunami and a hyper strengthening of the yen all while the US auto market has bounced back from historic lows during the financial crisis. Japanese brand market share peaked in 2 Continue reading

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Renault –constructeur de Nissan. In France

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In a Friday news dump that I am sure Renault management wants to frame positively comes the news Renault will add Nissan production to its bloated French factory footprint.  Renault, the builder of Nissans.  Interesting 14 years after a small group of maverick Renault managers arrived in Tokyo to rebuild a bankrupt Nissan company

While conventional wisdom has always been that Nissan would lever its world class productive Sunderland plant with some Renault product, it seems events have turned.

When a hobbled Nissan launched the 2001 Micra which shared components with the gbRenault Clio, CEO Carlos Ghosn played hard to get with then Prime Minister Tony Blair, threatening to go with a competitive site in French site.  Industry insiders smirked at the thought as Renault openly admitted Continue reading

J3 Automaker profits on track for FY 2013: probably so!

I’ve written in the past about the biggest impact on J3 earnings, not natural disasters or imagined acceleration…the yen.  With the yen trending stronger against the dollar over the past week, I took a look at estimates for FY2013 to double.  With Toyota and Honda using 80 yen/dollar and Nissan 82 yen/dollar, I’ve talked with some folks who are concerned that we may see some disappointment in the coming quarters if the yen hangs around these 78 levels.  I’m not so worried.  Let’s look at three points. Continue reading

CNH+Fiat Industrial: 1+1= 2 at best

Finally, Sergio Marchionne has pulled the trigger on fully merging CNH and Fiat Industrial, and pretty much in line with expectations. The proposal made to the BOD at CNH (which Marchionne is Chairman of) from FI (which Marchionne is chairman of) is for a merger of the two companies at “undisturbed” pricing” answer the only real question for investors: Is there any downside for CNH shareholders?  It turns out not really.

The inverse question was more important: Is there any upside?  Not really here either, and that may be a disappointment for some investors who speculated Continue reading

Disaster and Dollar comps will boost J3 OEM’s

As we pass the first year memorial of the heartbreaking 2011 Tōhoku earthquake and tsunami, it’s only appropriate to think of those who lost everything, including those who lost their lives.  I spent five of the most interesting personal and professional years of my career and life in Japan – my daughter was born in Seibo Hospital in Shinjuku-ku – and I have watched with little surprise, yet great admiration as the nation and its people have “endeavored to persevere” and move on with life and business.

The impact shocking on the J3 automakers, yet it’s amazing to see that they acted quickly to protect the business and prevent recurrence.  A year ago, we were focused on controller wafers and black paint!  Today, we are already seeing new sourcing strategies in place, massive production planning shifts and business growing.

From an earnings perspective, the crises cost the Japanese automakers almost 500 billion, a one-time cost that will give Q1 2012 comps a huge boost Continue reading

Again the yen: is dollar pickup real or just window dressing?

While  many investors have been focused on the collapsing Euro market and the booming US market, guess what happened to the yen?

Yes the domestic market in Japan is “spinning its wheels” even with government subsidies, the recent drop in yen will make a significant impact on J3 earnings if it holds.  Currently, forecasts are mostly based with FX rate lower than 80, if the yen pulls to the low 80’s that will be a slight boost on the year-end translation.  If it sticks, it could be some unexpected tailwinds.

This is key, particularly for Toyota which Continue reading