Tuesday, 29 July 2014

The view from Nissan is good for Toyota

Japanese auto companies - along with the Japanese stock market - are having a bit of a renaissance.  Back in early May I doubled my position in Toyota which has done well (7203 or the black line below)...but not as well as Nissan (7201 or the orange line) which has made money for investors year-to-date.

The above chart is a little deceptive as the Nissan share price has struggled against Toyota over longer periods (such as the last year). Still, it broke through the Y1000 barrier today as a first response to the publication of its latest quarterly numbers.  

The key metrics all moved forward which was good...

 ...with only Japanese domestic sales not showing sequential improvement.  On a retail volume perspective Japanese sales now only account for 11% of total sales showing Nissan, like Toyota, is a very global company.

In terms of quality of the result one notable factor was the lack of FX influence in these numbers due to the important FX rates (USD-JPY) only showing a moderate change over the last year.  I liked the positive volume/mix attribution as well as purchasing cost savings being greater than the rise in selling expenses.

Nissan also very usefully gave a large country/region split of some of these metrics.  Interesting to see that outside Japan volume appears to be more influential than (in my view) the slightly higher quality 'mix'.

 This is splitting hairs though.  In summary nice numbers from Nissan...and that bodes well for Toyota too where I am hopeful of another run at a Y6400+ share price:

And all of this, of course, is before we think about the potential for further boosts from another bout of yen weakness...

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