More signs of the very mixed nature of Asian economic activity at the moment, with a forecast for the global car industry that is one of the gloomiest yet.
Sharply lower sales this year and a very slow recovery in output, so slow that it could be 2016 before worldwide production regains the levels of 2007.
As we have just read, China’s industrial production showed a small upward movement in December, but will see nothing to boast about, by that country’s standards.
But elsewhere in the region, as we found late last week, it’s a very different story, especially in Japan where there was more gloomy news, this time from the corporate sector.
Apart from Japan, much of Asia was closed for the Lunar New Year’s holiday so the information that flowed was seemingly skewed.
Nissan provided more gloom for it and its fellow car giants like local rival, Toyota, by forecasting 2009 global car sales to fall to 55 million units, down some 14%.
This compares with a recent forecast earlier this month from General Motors of a figure of 57.5 million units, compared with 67.1 million in 2008.
The forecast was given by Nissan’s CEO, Carlos Ghosn in a speech at the weekend in the Middle East and reported in Tokyo yesterday.
He said in Saudi Arabia that it may take up to seven years for the global car industry to return to the 69 million units sold it 2007, which is now looking like the sector’s ‘golden year’.
Nissan and Honda are the subject of more rumours in Tokyo to join rival Toyota in reporting a loss for the year to March 31 next. Nissan did not confirm, or deny this report yesterday, according to Bloomberg.
A survey of Japanese car makers revealed they could chop at least 25,000 jobs at domestic businesses this year as they expect no improvement in sales.
General Motors cut 2000 more jobs in the US and shifts at a number of factories as sales fall closer to its new estimate for 2009.
General Motors cut its 2009 US estimate by 1.5 million units to 10.5 million and it could be lower, according to company executives, ending around 10 million, going on the first month’s sales so far, and looks like reaching that level this month.
US sales fell to 13.2 million in 2008, down 18% from 16.1 million in 2007. That was the biggest year-over-year sales drop since 1974 and the depths of the first oil shock.
Toyota meanwhile has boosted the number of days its Japanese plants will shut in February and March to at least 14 from the 11 suggested earlier this month, a sure sign that local and US sales are still slowing.
As a result Toyota says it expects domestic Japanese car production to fall this quarter (which is the 4th quarter of its March 31 financial year) and there are hints from Tokyo analysts that the company might start importing cars made offshore into Japan to take advantage of the very high level of the Yen, which is causing problems and cutting profits on exports.
Some reports claim the cuts to production at the company’s Japanese plants could see output chopped by upwards of 40% for the March quarter.
The company yesterday denied it was planning to cut 2009 calendar output worldwide 20% because as a spokesman said the giant had no idea of likely output figures for coming months. It’s a sign of just how confused and shocked this usually highly planned giant is at the moment.
Toyota said at the weekend that it is cutting production at its UK plants, but not employee numbers.
It also cut more output from its US plants.
Sales of Toyota- and Lexus-brand vehicles fell 5% to about 8 million units last year, Toyota said a week ago. It said earlier this month that it is expecting its first operating loss in 71 years for the March 31 financial year.
Honda has said it will cut its US plant at Swindon for four months this year and send employees on full and half pay after retraining.
And figures given at the US car dealers annual conference in Las Vegas revealed that between them, GM, Ford and Chrysler had a total of 988 dealers either close or consolidate (via takeover) in 2008.
But that still left around 13,700 still operating for the three giants.
And, in another big signal, the world’s second biggest earth moving equipment maker, Komatsu, has revealed its second earnings and sales downgrade in four months.
The company shares fell yesterday after the downgrade was assessed by Tokyo analysts.
Komatsu forecast a fall in net income in the year ending March 31 to 110 billion yen ($US1.24 billion), from the 190 billion yen forecast on October 29 last.
The new figure would be a 47% fall from last year’s results.
The company blamed the fall on sales down 15% because of the impact of the financial crisis which spread to the global construction market, triggering sudden declines in sales in China and other emerging markets.
Komatsu is the major player in China.
It had previously expected growth in those regions would be strong enough to offset declines in the US, Europe and Japan.
Operating profit, or sales minus the cost of goods sold and administrative expenses, will be down 33% at 200 billion yen instead of the forecast 300 billion yen.
The news isn’t encouraging for its bigger rival, Caterpillar of the US which reported 4th quarter and 2008 figures in the US overnight.
Caterpillar cut 20,000 jobs globally as it took a big financial hit from the 4th quarter slump.
The company will cut around 4,000 production employees and around 7,500 management and support staff. 8,000 of the job cuts will come from contractors not directly employed by the company.
The 12,000 direct cuts equal about 11% of the company’s total workforce world
