Analyst - Japan Autos, Hirakata Office

Noriaki Hirakata, CFA

Analyst - Japan Autos

Hirakata Office

Thematic (Sector/Industry)

<h2>Japanese automotive industry is unique in various ways</h2><p>The Japanese domestic "home" market amounts to less than 6% of global automotive sales with sales being concentrated in mini vehicles, minivans and hybrid vehicles, of which the former two have almost zero sales potential ex-Japan.</p><div class="content-highlight"><p>When Japanese automotive industry ventured into the overseas market, they were growing strongly for quite some time with exceptional growth in the US market.<br><br>Is this still the case? </p><p>We will try to answer this question with this insight.</p></div>

Japanese automotive industry is unique in various waysThe Japanese domestic "home" market amounts to less than 6% of global automotive sales with sales being concentrated in mini vehicles, minivans and hybrid vehicles, of which the former two have almost zero sales potential ex-Japan.When Japanese automotive industry ventured into the overseas market, they were growing strongly for quite some time with exceptional growth in the US market.  Is this still the case? We will try to answer this question with this insight.

Does the Japanese Auto Industry Have a Home Market or Is It Homeless?

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

<p>We are not changing our auto fair value estimates after President Trump announced his intent to levy 25% and 10% tariffs on steel and aluminum imports, respectively, into the U.S. Automakers use almost entirely U.S. steel and aluminum for their U.S. plants and their suppliers also source in the U.S., based on our talks with GM and Ford; so if the tariffs last a long time, we’d be more concerned about possible negative second order impacts of the tariff. Ford said on March 1 it sources 95% of its…</p>

We are not changing our auto fair value estimates after President Trump announced his intent to levy 25% and 10% tariffs on steel and aluminum imports, respectively, into the U.S. Automakers use almost entirely U.S. steel and aluminum for their U.S. plants and their suppliers also source in the U.S., based on our talks with GM and Ford; so if the tariffs last a long time, we’d be more concerned about possible negative second order impacts of the tariff. Ford said on March 1 it sources 95% of its…

Worst Case Scenario, Steel and Aluminum Tariffs Have Limited Impact on Light Vehicle Demand

<h2>US SAAR in February 2018 was 17.08 mil vs. 17.45 million in February 2017 and 17.16 million in January 2018</h2><p>The recent trend of trading margins for sales has continued in February with heavy spending on incentives on light trucks which have supported SAAR again in February 2018.<br>It seems incentives in passenger car segment have peaked out while the battlefield shifted to the light truck segment. We would be surprised if SAAR declines below 17 million in March.   <br><br>With overall demand for vehicles…</p>

US SAAR in February 2018 was 17.08 mil vs. 17.45 million in February 2017 and 17.16 million in January 2018The recent trend of trading margins for sales has continued in February with heavy spending on incentives on light trucks which have supported SAAR again in February 2018. It seems incentives in passenger car segment have peaked out while the battlefield shifted to the light truck segment. We would be surprised if SAAR declines below 17 million in March.     With overall demand for vehicles…

February 2018 US Automotive Sales: Sliding Down a Slippery Slope

<h2>We have been surprised by market`s rather positive reaction to mixed 3QFY17 results and recent Yen appreciation.</h2><p>Japanese automotive sector has performed reasonably well relative to TOPIX throughout 3QFY17 reporting season. To our surprise, the strengthening Yen didn’t reverse nor stop the relative outperformance of Japanese automotive stocks like it did historically.</p><p>We feel that the market perhaps didn’t thoroughly analyze 3QFY17 results and sees nominal profit growth as a sign of industry…</p>

We have been surprised by market`s rather positive reaction to mixed 3QFY17 results and recent Yen appreciation.Japanese automotive sector has performed reasonably well relative to TOPIX throughout 3QFY17 reporting season. To our surprise, the strengthening Yen didn’t reverse nor stop the relative outperformance of Japanese automotive stocks like it did historically.We feel that the market perhaps didn’t thoroughly analyze 3QFY17 results and sees nominal profit growth as a sign of industry…

Japanese Automotive Industry: U-Turn from Tail to Head Wind

Doing bespoke work since 2002....., Custom Products Group

Patrick Hansen

Doing bespoke work since 2002.....

Custom Products Group

Custom Products was started 14 years ago at Lehman Brothers by current co-founder Patrick Hansen, CFA. After 3 years at Lehman, Patrick moved the team to Macquarie Securities where Simon Rigney (co-founder) joined. 3 years ago we took Custom Products independent. 

Our core strength can be summed up three words. 1- Customization - we have very little off the shelf products and most work is done on a one on one bespoke basis. 2- Speed - We pride ourselves in our ability to get requests back to the client very quickly. 3- Confidentiality - We do not redistribute. There is no grace period where we wait a week and then mass blast. Any request stops with that client.

<p>Over the course of each year, Analysts for the most part follow a clear pattern. In May/June they start to look at the now FY1 numbers and make adjustments. As a result, estimates across the Street are all over the place. As the year progresses, Analysts usually slowly converge to company guidance.</p><p>However, there are some names that Analysts are still divided on despite being so close the year-end. We screened for names where the standard deviation across Street estimates is greater than 20% of…</p>

Over the course of each year, Analysts for the most part follow a clear pattern. In May/June they start to look at the now FY1 numbers and make adjustments. As a result, estimates across the Street are all over the place. As the year progresses, Analysts usually slowly converge to company guidance.However, there are some names that Analysts are still divided on despite being so close the year-end. We screened for names where the standard deviation across Street estimates is greater than 20% of…

With the Japan Fiscal Year Soon to Be Finished, Which Names Are Analysts Still Confused About....

Japan

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, and power products such as generators and farm machinery. The Company also operates a financial credit business. Honda Motor has manufacturing facilities in the US, Canada, the UK, France, Italy, Spain, Brazil, Mexico, India, and Thailand.

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Honda Motor (7267 JP)

Does the Japanese Auto Industry Have a Home Market or Is It Homeless?

Japanese automotive industry is unique in various waysThe Japanese domestic "home" market amounts to less than 6% of global automotive sales...

Noriaki Hirakata, CFA

Worst Case Scenario, Steel and Aluminum Tariffs Have Limited Impact on Light Vehicle Demand

We are not changing our auto fair value estimates after President Trump announced his intent to levy 25% and 10% tariffs on steel and aluminum...

Morningstar, Inc.

February 2018 US Automotive Sales: Sliding Down a Slippery Slope

US SAAR in February 2018 was 17.08 mil vs. 17.45 million in February 2017 and 17.16 million in January 2018The recent trend of trading margins for...

Noriaki Hirakata, CFA

Japanese Automotive Industry: U-Turn from Tail to Head Wind

We have been surprised by market`s rather positive reaction to mixed 3QFY17 results and recent Yen appreciation.Japanese automotive sector has...

Noriaki Hirakata, CFA

With the Japan Fiscal Year Soon to Be Finished, Which Names Are Analysts Still Confused About....

Over the course of each year, Analysts for the most part follow a clear pattern. In May/June they start to look at the now FY1 numbers and make...

Custom Products Group

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