MW: Japan auto stocks mixed after U.S. sales tumble
Shares of Japanese car companies were mixed Wednesday as investors considered their U.S. sales in February, which despite a drop of more than 35% from a year ago, were better than the slump experienced by the Big Three automakers.
In volatile afternoon trading in Tokyo, shares of Toyota Motor Corp. fell 2.5%, Honda Motor Co. lost 3.9% and Nissan Motor Co. added 1.7%, as they continued to gain market share in the U.S., although the downhill trend in sales persisted.
The Nikkei 225 Average added 1.3%, rebounding from intraday lows, after dropping for three straight sessions.
Elsewhere in the region, Australia's S&P/ASX 200 lost 1.6%, South Korea's Kospi climbed 2.7%. China's Shanghai Composite jumped 3.2%, Hong Kong's Hang Seng Index rose 0.7% and Taiwan's Taiex advanced 2.5%.
The decline in the shares came after Toyota's monthly sales in the U.S. dropped 40% year-on-year to 109,583 vehicles, Honda's slid 38% to 71,575 units and Nissan's fell 37% to 54,249 cars and trucks. In comparison, General Motors sales plunged 53%, Ford's dropped 48% and Chrysler's by 44%. In Seoul trading, shares of Hyundai Motor Co. added 0.7% as the South Korean auto major continued to outperform both the U.S. and Japanese car companies. Hyundai's U.S. sales slipped just 1.5% to 30,621 vehicles in February, helped by higher sales of the Elantra sedan.
The auto stocks were also in focus after the Nikkei business daily reported Wednesday that Honda and Mitsubishi Motors Corp. are about to join other Japanese automakers reportedly seeking loans from the government in the midst of the credit crisis. Mitsubishi Motors' stock was recently unchanged after moving in either direction.
Honda is considering borrowing billions of yen in dollar-denominated loans from the Japan Bank of International Cooperation for its U.S. financing unit, American Honda Finance Corp., the report said, without citing a source. The company, Japan's second-largest car maker has a strong financial position, but is aiming to hold more cash for auto loans and leases in anticipation of greater need for funds in summer, when auto sales typically increase.
Mitsubishi, meanwhile, has applied for a low-interest loan from the Development Bank of Japan, the report added. The DBJ is a government backed financial institution that has been entrusted with the responsibility of providing low-interest loans to non-financial companies.
The report comes a day after the same newspaper as well as other media reported that the auto-financing unit of Toyota - Toyota Financial Services Corp. - also put in a request with the JBIC for a $2 billion loan under a recently-launched program to help Japanese firms operating abroad.
The Japanese government, striving to alleviate problems faced by domestic corporations amid a global credit crisis, is planning to lend the JBIC about $5 billion from its foreign exchange reserves of more than $1 trillion by the end of this month, according to wire reports.
