Weak Japan Auto Sales in U.S.

123jump.com Staff
02 Oct, 2008
New York City

Japan auto sales in the U.S. plunged 30% as sales of light trucks and SUVs fall. The large decline of what was widely believed as stable market for the Japan auto makers put investors on the defensive. Steel makers and construction machinery companies fell the most in more than three years.

[R]5:00AM New York, 7:00PM Tokyo – A sharp decline in Japan auto sales in the U.S. September put investors on the defensive. Construction machinery and steel companies fell.[/R]

Stocks in Tokyo trading lost early gains and closed lower after the U.S. sales of Japanese automakers declined. September cars and suburban vehicles sales fell 27% to 964,870 from 1.3 million a year ago. Sales of Toyota Motor in the U.S. fell 32%, of Honda Motor Corp declined 24% and of Nissan Motor plunge 37%.

The steep decline of Japanese auto sales in the U.S., which have largely been insulated from the economic slowdown unnerved investors in Japan.

Construction machinery and steel makers suffered one of the worst declines in the recent years as fears of global economic slowdown turn to global recession.

Market Sentiment

In Tokyo trading Nikkei 225 fell 1.9% or 213 to 11,154.76, and the broader Topix Index slid 2.2% or 24.16 to 1,076.97.

In the first section of the Tokyo Stock Exchange 9.5 billion shares valued at 999 billion yen were traded and in the second section 224 million shares valued at 1.8 billion yen changed hands.

Of the Nikkei 225 stocks 60 rose, 159 declined, and 6 were unchanged. Shionogi & Co. led advancers in the index shares with a rise of 6.33%.

U.S. Auto Sales Plunge in September

Researcher Autodata Corp. reported on its Web site today that Japanese auto sales in America declined 30% in September. Total imported vehicles sales declined to 1.94 million vehicles from 2.37 million vehicles and total seasonally adjusted annual sales declined to 12.50 million from 16.19 million a year ago.

In the first nine months auto sales in the U.S. declined 12.8% to 10.7 million vehicles of which passenger car sales fell 4.1% and light truck sales declined 20.6%.

Toyota motor sales in the month declined 32.3% to 144,260 units from 213,042 units in the same period a year earlier and for the first nine months sales declined 10.4% to 1.79 million units.

Honda sales in the month plummeted 24% to 96,626 units from 127,200 units a year ago and in the first nine months declined 1.1% to 1.18 million vehicles.

Nissan Motor Company vehicles sales in the month plunged 36.8% to 59,565 units from 94,269 units from the same period a year ago and fell in the first nine months 785,693 vehicles.

Mitsubishi Motors vehicles sales in the month plunged 39% to 7,378 units compared with 12,102 last year and for the year dropped 24% to 80, 105 units.

Sales for Mazda and Isuzu tumbled 35.6% to 16,169 units and 54.3% to 258 units respectively.

On the overall total light vehicle retail sales fell 26.6% year-on-year to 964,873 units from 1.31 million.

U.S. Manufacturing Contracts in September

The U.S. Institute of Supply Management reported today that manufacturing index fell by 6.4 percentage points to 43.5% in September. A reading below 50 indicates the manufacturing sector is contracting.

According to the report, industries that registered growth in September include petroleum and coal products: paper products; food, beverage & tobacco products; miscellaneous manufacturing; computer & electronic products; and chemical products in that order.

Conversely industries reporting contraction in September were nonmetallic mineral products; textile mills; wood products; furniture & related products; apparel, leather & allied products; machinery; transportation equipment; primary metals; fabricated metal products correspondingly.

Gainers & Losers

Shionogi & Co. led advancers in the Nikkei 225 index shares with a rise of 6.33% followed by rises in Fujitsu Ltd. of 4.67%, in Toyo Seikan of 4.61%, in NTT DoCoMo of 4.23%, and Nippon Telegraph of 3.85%.

Hitachi Construction led decliners in the Nikkei 225 index shares with a fall of 14.73% followed by losses in Tokai Carbon Co. of 13.89%, in Japan Steel Work of 13.30%, and Sumitomo Heavy Industries of 12.71%. Komatsu lost 10.70% on the news.

The three construction equipment companies dropped sharply in a decade after the fears of economic slowdown gripped investors. The Japan Construction Equipment Manufacturers Association has predicted a sharp decline in global sales growth and may turn negative if the current U.S. credit market jitters persist.

Commodity stocks declined on speculation that demand for raw material dropped. Mitsubishi Corp. declined 8.71%, Inpex tumbled 8.53%, and Mitsui & Co shed 7.54%.

Steelmakers continued their slide as global economic worries drag the sector. Nippon Steel dropped 9%, JFE Holdings Inc dropped 9% to 2,855 yen and Kobe Steel declined

Nippon Steel, Kobe Steel in 20 billion yen JV

The Nikkei News reported today that Nippon Steel Corp. and Kobe Steel Ltd. said they will spend 20 billion yen in a joint venture designed to recycle steel dust.

Fujitsu May Sell Western Digital Corp.

Bloomberg News reported on its Web site today that unnamed executives at Fujitsu said the company is considering selling the storage drive business Western Digital Corp. The business might be valued between 70 billion yen and 100 billion yen.