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Japan & Korea Sales and Production Commentary- June 2022

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Japan/Korea revenue
May 2022: -18.2% .38 million models vs. .46 million
models

YTD 2022: -15.2% 2.37 million models vs. 2.79 million
units

  • Japanese light-weight automobile sales diminished 23% yr on year (y/y)
    in Could 2022. For important OEMs, item offer disruption ongoing in
    reaction to shortages of semiconductors and other factors,
    which include some electronic products. This could travel the industry down
    in the shorter expression, in addition to the simple fact that market restoration
    could also be delayed mainly because of the ongoing political and financial
    uncertainties arising from the geopolitical tension of the
    Russia-Ukraine crisis.
  • Most of the domestic OEMs in Japan posted a calendar year-on-calendar year
    minimize in product sales, apart from for Mitsubishi in Could. Product sales at Toyota
    (which include the Lexus brand name) lowered 21.2% y/y. Sales at Honda
    were being down 20.7% y/y and profits at Nissan lowered 9.7% y/y.
  • In spite of the recovery from the COVID-19 disaster in 2020,
    part and semiconductor shortages induced inadequate generation
    and hindered development in 2021. This will probable carry on for at least
    the initially half of 2022, and the further geopolitical disaster
    among Russia and Ukraine will put even further downward pressure on
    the automotive industry with a deteriorating economic atmosphere.
    The Japanese market’s in general domestic revenue in 2021 completed at
    4.36 million models, down 3.3% from the year earlier. Domestic gross sales
    will be approximately flat in 2022 at 4.36 million models at the most, with
    some recovery momentum expected towards the latter 50 percent of the yr,
    while it is not likely to fully compensate for the drops found in
    2021.
  • South Korea’s total light car or truck profits declined 7.8% in Could
    2022, generally mainly because of the world semiconductor scarcity and the
    prolonged COVID-19 pandemic, which continued to weigh down vehicle
    creation and revenue.
  • South Korea’s submit-use tax aid ended in 2020, but
    the govt extended it till June 2021 to tentatively enhance
    car sales, and then prolonged it further right up until the close of 2021.
    This once again would past right until June 2022, which has been extended
    once more to the close of 2022. On the other hand, the prolonged effects of the
    unique use tax reduction are waning and turning into much less
    influential on sales and development sustainability in the short
    phrase, as well as the growing detrimental impact from production
    action and ingredient shortages.
  • In the meantime, component shortages and declining manufacturing
    exercise ongoing to have a destructive impact. South Korea’s profits
    of new motor vehicles in 2021 declined 8.6% from the calendar year before, to
    1.70 million models. Profits in 2022 will very likely minimize even more by
    7.6% as opposed with 2021, to 1.58 million units.

Japan/Korea output
Might 2022: +1.1% .73 million units vs .72 million
units

YTD 2022: -10.1% 4.29 million units vs 4.78 million
models

  • In Japan, May 2022 output once more dropped 8.8% 12 months on calendar year
    (y/y). In addition to the ongoing semiconductor shortages, several
    demanding lockdown actions in significant Chinese towns such as Shanghai
    because of to the enlargement of the COVID-19 Omicron variant have prompted
    more procedure cuts at Japanese plants because of to areas shortages
    from China given that late March. In June, some OEMs this kind of as Toyota,
    Daihatsu, Subaru, Suzuki, and Nissan nonetheless have to halt their
    operations in Japan because of logistic disruptions, though plant
    operations in Shanghai have been progressively resumed. In May 2021,
    semiconductor shortages had presently destroyed domestic output.
    Thus, May possibly 2022 success had been decrease, at the similar level as April
    2022 success. The restoration period step by step will most likely begin from
    July, whilst challenges of provide constraints together with semiconductors
    can still be seen in the remainder of 2022. Many OEMs amazingly
    achieved calendar year-on-year will increase in May perhaps 2022 for the reason that of reduced
    effects in Might 2021 due to semiconductor shortages. Suzuki grew
    .7%, Subaru rose 26.1%, Mitsubishi swelled 30.7%, Honda
    strengthened 61.6%, and Nissan amplified 89.4% y/y. Nonetheless, all
    the five OEMs’ outcomes were being decrease than Might 2019 production actuals.
    In the meantime, Toyota including Daihatsu declined 26.5%, and Mazda
    lessened 32.7% y/y. These two OEMs may perhaps have been significantly
    afflicted by component shortages mostly from mainland China in Could
    2022. Toyota even extra extra downtime in modern weeks.
  • Complete-year 2022 generation ought to modestly get well 2.9% y/y, to
    7.67 million units, down by 59,000 units, or .8%, since previous
    month. Since of the component lack concerns amid the Chinese
    zero-COVID plan, Japanese automobile production has been damage, all over again
    down by 19% (190,000 models) from the past forecast in the 2nd
    quarter of 2022, such as downgrades for April 2022 results
    (41,000 models). OEMs prepare to execute recovery output commencing
    3rd quarter 2022. Nevertheless, we are checking the latest ailment
    extremely cautiously amid unsure current market conditions, these as the
    ongoing Russia-Ukraine crisis, inflation pressures, a slipping neighborhood
    forex, semiconductor shortages, and China’s zero-COVID
    plan.
  • South Korean light car output elevated 19.9% y/y to
    .30 million units in May possibly 2022. Most automakers grew owing to the
    foundation impact from the plant shutdowns amid semiconductor shortages
    and elevated generation times. Hyundai like Kia was up 19.6%,
    GM Korea was up 23.4%, and Renault Samsung rose 58.7%. On the other
    hand, SsangYong lessened by 10.4%.
  • Though year-to-date output ongoing to decline to 1.44
    million models, the level of the decrease narrowed to 2.3% y/y, many thanks
    to the double-digit growth in Could. Comprehensive-calendar year 2022 creation in
    South Korea ought to improve 2.2% to 3.50 million models from past
    12 months predominantly for the reason that the operational capacity for semiconductors has
    produced some progress. In the meantime, the truckers strike from 8 to 14
    June in South Korea was yet another strike to its manufacturing restoration.
    No matter if the manufacturing loss can be compensated all through the 12 months
    will be hugely dependent on the chip source development.

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Posted 05 July 2022 by Yoshiaki Kawano, Supervisor, Japan and Korea Car or truck Revenue Forecasts, Automotive, S&P World Mobility&#13
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This posting was revealed by S&P International Mobility and not by S&P International Rankings, which is a individually managed division of S&P World.