Japan car sales continue rise, S. Korea gains overseas

Friday, 2 December 2011 00:00 -     - {{hitsCtrl.values.hits}}

  • Japan non-mini auto sales rise 24.1 pct in Nov
  • Honda, hurt by floods, ekes out 1.5 pct gain
  • Hyundai up 19.3 pct, Kia up 8.5 pct on overseas sales
  • Maruti sales down 18.5 pct as India demand slows

MUMBAI (Reuters):  Japanese car sales in November rose by more than 20 percent for the second consecutive month thanks to a low comparison base from last year while South Korean carmakers saw strong growth in overseas sales more than make up for falling sales at home.

Carmakers in Japan continue to recover production after the country’s March earthquake, but minimal sales growth for Honda Motor Corp illustrated the impact of recent flooding in Thailand, a major production base.

Automobile sales in Japan, excluding 660cc minivehicles, rose 24.1 percent in November from a year earlier, data from a trade association showed. October last year was the first full month after the expiration of government subsidies to replace cars older than 13 years.

Sales at top-ranked Toyota Motor Corp, excluding the Lexus brand, climbed 24.2 percent, while Nissan Motor Co saw sales rise 25.4 percent.

Honda, which was hit the hardest among Japanese carmakers by Thai floods cut production across the industry’s global supply chains, saw sales rise by only 1.5 percent.

The flooding, along with a persistent strength in the Japanese yen and the ongoing global economic turmoil, are slowing the recovery of Japanese carmakers following the March 11 earthquake, analysts say.

“The yen staying strong and the drop in share prices are worsening company earnings,” an official from the Japan Automobile Dealers Association told reporters. “While it is up to how things will improve from hereafter, these are among the main issues for the auto industry.”

In South Korea, Hyundai Motor Co’s global sales were up 19.3 percent, while sales at its affiliate, Kia Motors Corp, rose 8.5 percent.

Overseas sales jumped 26.1 percent at Hyundai and 13.4 percent for Kia, offsetting a roughly 10 percent sales fall for both firms in the domestic market.

The duo, which together rank fifth in global car sales, are likely to continue to outperform the global market, but their earnings growth may slow in the face of rising competition and the slowing economy at home and abroad, analysts say.

A bilateral trade deal with the United States, which recently gained an approval from South Korea’s parliament, will boost price competitiveness of imported vehicles in South Korea, one of the major markets for Hyundai and Kia.

In India, Maruti Suzuki, the country’s top car maker, said sales in November fell 18.5 percent, as the troubled carmaker partially recovered from a 53 percent fall registered in October.

Domestic sales were down 19.2 percent as the company continues to struggle with a demand slowdown in Asia’s third-largest economy caused by high interest rates and rising costs.

Maruti, 54.2 percent owned by Japan’s Suzuki Motor Corp , which lost $500 million worth of production this summer due to strikes, will likely see sales fall for the year to March 2012, its chairman said last month.

U.S. auto sales for November are expected to be the best month in more than two years, as higher incentives and better model selection drive the annualized sales rate above 13 million cars for the third consecutive month.

Deferred demand for Honda and Toyota vehicles may have boosted U.S. sales for the month by 200,000, an analyst said, with the two Asian carmakers seen capturing a combined 23.5 percent of the market in November, up from 20 percent in October.