Japan's automakers see positive signs ahead

TOKYO — The fiscal year ended March 31 was a challenge for Japan’s automakers, as it was elsewhere. But leaner operations, favorable exchange rates and high demand for profitable models in the U.S. market helped bottom lines — even as the automakers warned the current fiscal year would be a tough one hammered by soaring raw material costs and supply chain uncertainty.

Nissan Motor Co.: Posted a $2 billion operating profit for the just-ended fiscal year, a turnaround from two fiscal years of red ink. The rebound puts Nissan ahead of schedule in achieving CEO Makoto Uchida’s goal of delivering a sustainable 5 percent operating profit margin by March 31, 2024.

Part of the financial improvement came through the automaker cutting global capacity by 20 percent, trimming the number of nameplates by 15 percent and slashing about $2.87 billion in fixed costs.

Mazda Motor Corp.: Operating profit rose to $854.8 million as the recovering automaker leveraged lean product pipelines and a crossover-rich lineup. Mazda managed to eke by with a 3 percent decline in global sales to 1.3 million vehicles. Looking ahead, it predicts operating profit will increase 15 percent this fiscal year, riding a 19 percent surge in sales.

Honda Motor Co.: Shrugged off the market and supply chain upheaval to deliver a 32 percent increase in operating profit to $7.15 billion. Global auto sales fell 10.4 percent to 4.1 million vehicles, led by a 13 percent decline in North American deliveries. Volume should increase this fiscal year to 4.2 million vehicles, thanks largely to an influx of new models, including redesigns of the CR-V, Pilot and Accord. But that won’t be enough to offset the surging metals and logistics prices plaguing the industry. Honda is among those expecting operating profit to retreat this fiscal year, by about 7 percent.

Mitsubishi Motors Corp.: Bounced back to profitability on higher vehicle sales and beneficial foreign exchange rates. Global retail sales expanded 8.7 percent to 250,000 vehicles in the quarter ended March 31. Despite rising procurement costs, Mitsubishi forecast steady operating profit in this fiscal year with continued momentum of a more profitable vehicle mix.

Subaru Corp.: Operating profit fell 12 percent to about $742.4 million for the fiscal year ended March 31, mainly on a 15 percent decline in global sales caused by production interruptions. But Subaru CEO Tomomi Nakamura last week forecast a 28 percent sales rebound in the fiscal year through March 31, 2023, and more than a doubling of operating profit to about $1.64 billion.

Nakamura also announced that Subaru will invest $2 billion to construct a dedicated electric vehicle plant in Japan that will come online around 2027.