Nissan Leads Asian Carmaker Gains - Bloomberg

Enlarge image The company, Japan’s second-largest automaker, said its Nissan-brand cars rose a combined 32 percent.

The company, Japan’s second-largest automaker, said its Nissan-brand cars rose a combined 32 percent. Photographer: Tim Rue/Bloomberg

Oct. 4 (Bloomberg) -- Jessica Caldwell, an analyst at Santa Monica, California-based Edmunds.com, talks about the outlook for Asian carmakers. Nissan Motor Co. posted U.S. sales gains in September as the two largest Asia-based auto brands, Toyota Motor Corp. and Honda Motor Co., still struggled to deliver enough vehicles to dealerships. Caldwell speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)

Enlarge image Hyundai, South Korea’s largest automaker, sold 52,051 vehicles, up 12 percent from a year earlier.

Hyundai, South Korea’s largest automaker, sold 52,051 vehicles, up 12 percent from a year earlier. Photographer: Andrew Harrer/Bloomberg

Toyota Motor Corp. (7203) and Honda Motor Co., still struggling to deliver enough vehicles to dealers, lost share of the U.S. market as Nissan Motor Co. grew more than expected and industrywide sales were the best since April.

Toyota, held back by tight supplies of Prius hybrids and Tundra pickups, sold 17 percent fewer vehicles, reducing its share to 11.5 percent from 15.3 percent a year earlier, according to researcher Autodata Corp. Honda’s 8 percent drop in deliveries cut its share by 1.7 points to 8.5 percent.

Inventory at Toyota was about 40 percent less at the beginning of the month than a year earlier, said Bob Carter, group vice president of U.S. sales. The automaker, Asia’s largest, returned to full production last month after output was disrupted by Japan’s March 11 earthquake, and supply of some models is recovering more slowly than anticipated.

“The worst is behind us, and we expect to exceed year-ago sales levels beginning in October with continued growth throughout the fourth quarter,” Carter said in a conference call yesterday.

Output is rising at Toyota and Honda’s North American plants after being slowed for five months by parts shortages due to the March earthquake.

Nissan, with fewer suppliers affected, has said its North American plants have been at full output since about June. The Yokohama-based carmaker, Japan’s second-largest, boosted U.S. sales 25 percent last month from a year earlier.

U.S. Automakers

Hyundai Motor Co. (005380) and affiliate Kia Motors Corp. (000270), South Korea’s two biggest carmakers, joined Toyota and Honda in missing consensus estimates for September sales as industrywide deliveries gained 9.9 percent, led by volume gains for General Motors Co. (GM), Ford Motor Co. (F) and Chrysler Group LLC, majority owned by Fiat SpA. (F) The U.S.-based companies had increases of 20 percent, 9 percent and 27 percent, respectively.

September light-vehicle deliveries rose to a seasonally adjusted annualized rate of 13.1 million, according to Woodcliff Lake, New Jersey-based Autodata Corp. The average estimate of 14 analysts surveyed by Bloomberg was for a 12.8 million pace. The rate is the highest since April’s 13.2 million, when lost output caused by Japan’s earthquake and tsunami began crimping supply of parts and finished cars.

Toyota and Honda “still don’t have quite the selection of vehicles needed,” said Jessica Caldwell, an analyst at Santa Monica, California-based Edmunds.com. “Their cars are being produced again, but you still have to have selection consumers want. It will take time to get back to a normal level.”

Overall U.S. sales should benefit from rising inventory at Toyota and Honda dealerships, said Paul Taylor, chief economist for the National Automobile Dealers Association.

“A complete inventory makes for stronger sales overall,” Taylor said. “There’s pent-up demand, and it’s based on need, not necessarily on discretionary consumption.”

Toyota fell 2.5 percent to 2,568 yen at the 11 a.m. trading break in Tokyo, compared with a 1.6 percent drop in Japan’s benchmark Nikkei 225 Stock Average. Honda dropped 4.1 percent, and Nissan declined 1.9 percent. Hyundai fell 3.1 percent to 204,500 won in Seoul, while Kia lost 3.6 percent.

Japanese and South Korean automakers sold 445,891 new cars and trucks in the U.S. last month, up 0.9 percent from a year ago, trailing the 9.9 percent industrywide increase.

Toyota said sales of its Toyota, Lexus and Scion brand vehicles totaled 121,451 last month, down from 147,162 a year earlier. The carmaker’s 17 percent sales drop exceeded a 15 percent decline that was the average expectation of five analysts surveyed by Bloomberg.

The company has more than a 20-day Prius supply at the start of October, the highest “I can remember,” Carter said.

At Honda, the 8 percent sales decline exceeded the 6.1 percent drop that was the average of five analyst estimates. Still, that was an improvement from the previous four months, when deliveries slid at least 20 percent for Tokyo-based Honda.

The company is scheduling overtime shifts at U.S. assembly plants to rebuild inventory, Ron Lietzke, a spokesman, said in a Sept. 28 phone interview.

“Predicting future sales is always risky, but supply of new vehicles is coming into dealerships,” John Mendel, Honda’s executive vice president of U.S. sales, said via e-mail.

“We’re optimistic that our fourth-quarter sales will be back to normal levels and, given economic stability, we could exceed last year’s sales,” Mendel said.

Nissan’s 25 percent sales gain compared with the 18 percent average of five analyst estimates. The company said its Nissan- brand cars rose a combined 32 percent, led by the new Versa compact.

With vehicle production and inventory recovering for Toyota and Honda, the fourth quarter may be the year’s strongest for auto sales, Al Castignetti, Nissan’s vice president of U.S. sales, said in a phone interview.

“Inventory levels for all manufacturers are going to get back to normal, and people who have been sitting on the fence are likely to get back in the market,” he said. “If we have another month like September, I’d say all bets are off.”

Nissan’s September market share gained 1.1 percentage points to 8.8 percent, according to Autodata. The company’s U.S. sales so far this year have risen 15 percent compared with declines of 8.9 percent for Toyota and 5.8 percent for Honda.

Nissan “increased not only year over year, but month over month, not an easy thing to do,” Caldwell said. “They’re strong from an inventory standpoint, relative to Toyota and Honda, and have been aggressive about getting that message out.”

Hyundai sold 52,051 vehicles, up 12 percent from a year earlier. The gains were led by its revamped Elantra small car, the new Veloster hatchback and Santa Fe and Tucson sport-utility vehicles. Kia sold 35,609 vehicles, up from 30,071 a year earlier.

Combined sales for the two Seoul-based partners, which operate separately in the U.S., totaled 87,660 for the month, or 14 percent more than a year ago. That was less than the 20 percent average of three estimates compiled by Bloomberg.

Both companies said sales were their best ever for the month.

Japan’s Mazda Motor Corp. (7261) said deliveries rose 37 percent last month, its biggest increase this year. Subaru, the auto brand of Fuji Heavy Industries Ltd. (7270), reported a 2.3 percent sales drop for the month, citing tight supplies of its all-wheel drive cars and wagons.

Mitsubishi Motors Corp. (7211) posted a 17 percent increase and Suzuki Motor Corp. (7269)’s sales grew 23 percent.

To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net

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Euro Declines as Stocks Pare Gains; Yen Tumbles on Concern Japan Will Act - Bloomberg

The euro fell against the majority of its most-traded counterparts, erasing earlier advances, as stocks fluctuated, reducing demand for higher-yielding assets.

The yen slid from almost its postwar record high versus the dollar after Japanese Finance Minister Yoshihiko Noda said he’s ready to take decisive action to stem its strength. The dollar fell earlier amid bets Federal Reserve Chairman Ben S. Bernanke will signal at an Aug. 26 conference in Jackson Hole, Wyoming, the Fed will take further steps to boost the U.S. economy.

“Everyone is focusing on equities and taking their cues from that,” said Andrew Cox, a New-York based currency strategist at Citigroup Inc. “The euro has traded in a very tight range, and we don’t see a catalyst for that to change, at least before Friday.”

Europe’s 17-nation currency slipped 0.2 percent to $1.4374 at 3:05 p.m. in New York, from $1.4397 on Aug. 19. It earlier appreciated as much as 0.3 percent. The yen fell 0.3 percent to 76.74 per dollar, after reaching a post-World War II high of 75.95 Aug. 19. The Japanese currency declined 0.1 percent to 110.31 per euro.

Switzerland’s franc fell versus most major counterparts on speculation the country’s central bank will take move further to curb its gains. New Zealand’s dollar and Sweden’s krona gained against the euro, yen and franc.

The Standard & Poor’s 500 Index was up 0.2 percent after rising as much as 2 percent and falling 0.2 percent.

The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback against the currencies of six major trade partners, rose 0.1 percent to 74.072, from 74.009 on Aug. 19.

Bernanke’s scheduled appearance at the Kansas City Fed’s annual economic conference in Jackson Hole comes as U.S. manufacturing weakens, consumer confidence tumbles and the unemployment rate holds above 9 percent.

At last year’s event, he foreshadowed a second round of asset purchases under quantitative easing to improve the economy. The central bank bought $600 billion in Treasuries from November through June.

“Most of the focus today and probably this week is on what Bernanke will and won’t say on Friday,” said Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto. “Bernanke is likely to point to all the tools they have in their toolbox. If he does that, it might prove negative for the U.S. dollar.”

The euro also declined as German Chancellor Angela Merkel reiterated her opposition to issuing euro-area bonds as a way to help solve Europe’s sovereign debt crisis, saying yesterday she won’t let financial markets dictate policy.

Investor calls for euro bonds intensified last week as concern about the debt crisis and a slowing global economy drove down European stocks. The Stoxx Europe 600 dropped to 223.13 on Aug. 19, the least since July 2009.

The premium European banks pay to borrow in dollars through the swaps market increased in a sign lenders may be facing mounting pressure to raise funds in the U.S. currency. It last decreased on Aug. 15.

The cost of converting euro-based payments into dollars, as measured by the one-year cross-currency basis swap, fell one basis point, or 0.01 percentage point, to 49.5 basis points below the euro interbank offered rate, or Euribor, indicating a higher premium to buy the greenback. Basis swaps allow investors to borrow in one currency and simultaneously lend in another.

Japan’s Noda told reporters in Tokyo today he’s become “more concerned about the worsening of the yen’s one-sided movements.” The government will take “bold actions if necessary and won’t rule out any possible options,” he said.

Japan last intervened in the currency market, selling yen in an effort to halt its climb, on Aug. 4. That drove the currency down as much as 4.1 percent against the greenback. It has since appreciated 2.8 percent.

“We’ve had further comments by Noda and other Japanese officials indicating a lack of comfort with yen strength,” said Michael Woolfolk, senior currency strategist in New York at Bank of New York Mellon Corp., the world’s largest custodial bank, with more than $26 trillion in assets under administration. “Renewed jawboning has contributed to yen weakness.”

The franc weakened amid speculation the Swiss National Bank will introduce new measures to damp demand for the nation’s currency. The SNB cut borrowing costs to zero earlier this month, increased bank sight deposits almost sevenfold and left the door open for additional measures.

The franc declined 0.5 percent to 1.1355 per euro and was 0.6 percent weaker at 79.01 centimes per dollar.

Most Swiss support intervention by their central bank to curb gains in the franc, the newspaper SonntagsZeitung reported yesterday. The newspaper also said, without naming sources, the Swiss Cabinet expects the SNB to set an exchange-rate target of at least 1.2 francs per euro.

SNB spokesman Walter Meier declined to comment on whether the central bank had intervened.

The franc advanced 10 percent developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen rose 4.9 percent and the dollar is down 2.1 percent.

The franc and yen tend to strengthen during periods of financial turmoil because their export-reliant economies don’t need foreign capital to balance current accounts, the broadest measure of trade.

New Zealand’s dollar strengthened 0.9 percent to 82.58 U.S. cents, and the Swedish krona appreciated 0.4 percent to 6.3630 per U.S. dollar.

To contact the reporter on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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