Japan Automakers:

 Article Source: https://mainichi.jp/english/articles/20220228/p2g/00m/0bu/059000c

Article:

TOKYO (Kyodo) -- Total domestic output by Japanese automakers in 2021 fell to its lowest level in 45 years, dropping 2.7 percent from a year earlier to 7.85 million vehicles, amid a supply shortage caused by the coronavirus pandemic, industry data showed Monday.

According to the Japan Automobile Manufacturers Association, total output in Japan decreased for the third straight year. The prolonged global semiconductor crunch could continue to hit the auto industry this year.

The figure is about 42 percent lower from its peak of 13.49 million units produced in 1990. Automakers may face difficulty in sustaining employment and maintaining factories if the level of output remains low.

Ideas:

Total output may have dropped but that's still a lot of vehicles being produced in a single year. Yes, most likely companies need to keep a certain level of output to keep profits high and to keep shareholders happy.

If they are always showing they aren't meeting their production targets and or not reaching the profit targets that shareholders want, then they can't attrack extra shareholder funding which they might need for the future.

Of course no one could have expected the global semiconductor shortage. In South Korea Hyundai and KIa have said their backorders now are over 1 million vehicles and it can take up to year to clear all of the backorders.

But a 42 percent drop from 1990 indicates there are many more players globally now. For example Kia and Hyundai in South Korea were just beginning to make their presence in the global market.

Article:

The industry data was compiled based on figures from eight major automakers, including Toyota Motor Corp. and Honda Motor Co., and four manufacturers of commercial vehicles such as Isuzu Motors Ltd.

Total output of passenger cars dropped 4.9 percent from 2020 to 6.62 million vehicles, but the data showed that those of trucks and buses increased. The output of trucks rose 11.2 percent to 1.15 million units, and buses increased 5.5 percent to 73,659.

Domestic production largely exceeded 10 million units between 1980 and 2008, but has been below that level since falling to 7.93 million units in 2009. The strengthening of the Japanese yen and the relocation of factories overseas have led to a decrease in domestic output.

Ideas:

As companies relocate to be closer to their global customers, they might be able to decrease shipping costs, reduce costs related to materials costs, and maybe offset the strengthening yen.

But at the same time it means maybe less workers in Japan and or maybe less good jobs for workers in Japan, as maybe even Japanese companies chase lower wages in other countries too.

So the domestic manufacturing auto market is not the same it was in 1990 or even 2009, as companies expand globallly with more production plants in other countries and less and less each decade in Japan.

Article:

Among the eight major automakers, Mitsubishi Motors Corp. was the only one that saw an increase in output.

According to the data, oversees output stood at 16.46 million units in 2021, a 7.1 percent rise from a year earlier and the first increase in three years, amid recovering demand in the United States and other markets.

Ideas:

Its possible Mitsubishi and its production plants might not have had the shutdowns related to the pandemic or shortages that other vechicle companies did.

During the pandemic in 2020 and 2021 most likely consumers were waiting to buy a new car and the pandemic had cause a lot of problems for consumers/customers everywhere.

But at 2021 continued on consumers maybe began to feel better and demand for a new car increased globally.

But of course there was and is the chip shortage that might have effected some car manufacturing more than others.

As the example for South Korea's two largest car manufacturers. Japanease companies too might be experiencing a significant increase in backorders due to the chip shortage.

As the chip manufacturing plants were hit with pandemic problems of shutdowns, and then with shortages of supplies needed to produce the chips, then these challenges have moved over to car manufacuring companies because chip factories most likely are still trying to fill backorders which of course means car companies are unable to produce as many cars as they want or need which then transfers over to customers/consumers who might not be able to get their new car for up to a year.

Have a nice day and be safe!