Manufacturers Reaping Benefits of Lower Yen: Automobile, Electronics Firms See Solid Growth

The Daily Yomiuri (Toyko, Japan), April 26, 2013 | Go to article overview

Manufacturers Reaping Benefits of Lower Yen: Automobile, Electronics Firms See Solid Growth


Earnings of domestic manufacturers with high rates of domestic production are on the rise due to the recent weakening of the yen's value in foreign exchange markets.

Business results of automakers as of March 2013 were or are forecast to improve, with higher earnings seen for companies with a greater number of production bases in Japan.

Mitsubishi Motors Corp. on Thursday announced its consolidated business results as of March 2013, posting sales growth of 0.4 percent from a year ago to 1.82 trillion yen, the first increase in two business years.

Its after-tax profit rose 58.7 percent to 37.9 billion yen, a fresh record for the first time in 10 business years.

MMC President Osamu Masuko said at a press conference: "The profit-loss balance for domestically made cars has drastically improved. We are regaining competitiveness."

Daihatsu Motor Co. posted sales growth of 8.2 percent to 1.76 trillion yen, with after-tax profits rising 25 percent to a record 81.4 billion yen.

"As economic conditions recover, domestic demand has increased," Daihatsu President Koichi Ina said.

Looking toward March 2014, both MMC and Daihatsu expect to achieve record-high profits if the exchange rate stays between 93 yen and 95 yen against the dollar and the positive effects of the yen's depreciation continue.

In the auto sector, the higher a company's percentage of domestic production, the more it tends to benefit from the yen's fall.

In 2012, MMC's rate of domestic production was 46 percent and Daihatsu's was 65 percent, much higher than Nissan Motor Co.'s 23 percent and Honda Motor Co.'s 25 percent.

Toyota Motor Corp.'s domestic production rate is 40 percent, as the company sets a goal of manufacturing 3 million cars in Japan to maintain domestic jobs.

Toyota, Fuji Heavy Industries Ltd. with 75 percent domestic production, and Mazda Motor Corp. with 71 percent, are expected to record better business results as of March 2013.

Electronics makers that produce a large percentage of their product in Japan are also seeing a positive effect from the lower value of the yen. …

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