Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Honda and Nissan to sell a quarter of a million fewer cars because of chip shortage

Stock MarketsFeb 09, 2021 07:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A visitor is seen at Nissan Motor Corp.'s showroom in Tokyo

By Eimi Yamamitsu and Tim Kelly

TOKYO (Reuters) - Japan's second and third largest automakers, Honda Motor and Nissan (OTC:NSANY) Motor, will sell a combined 250,000 fewer cars in the current financial year as a global shortage in semiconductor chips hits production.

The automakers made the announcement as they unveiled brighter outlooks for the financial year ending March 2021 as automobile markets, led by China, rebounded from a coronavirus-induced slump. Honda and Nissan also reported better-than-expected results for the October-December quarter.

But Honda cut its sales target by 100,000 vehicles, or 2.2%, on Tuesday to 4.5 million cars, while Nissan lowered its target by 150,000 vehicles, or 3.6%, to 4.015 million units as a chips shortage forced both companies to curb output.

"Popular models that sell well were hit hard by semiconductor shortage," Seiji Kuraishi, Honda's Chief Operating Officer said during an online press briefing. "We needed to swap around and adjust production plans. But that wasn’t enough," he added.

The global automobile industry has been grappling with a chip shortage since the end of last year, which has in some cases been exacerbated by the former U.S. administration's sanctions on Chinese chip factories.

Asian chipmakers including Taiwan Semiconductor Manufacturing Co are expanding production to make up for shortages, but have warned that it may take some time to crank up output.

Some companies such as Japan's Renesas Electronics are also seeking price hikes for semiconductors that control engines, sensors and other automotive systems.

Honda's Kuraishi predicted that the shortage would ease in the first half of 2021.

His company last month cut output by about 4,000 units, mainly its Fit and Jazz models, and is also reducing output of five models at five facilities in the United States and Canada.

China's GAC said its joint venture with the automaker had received warnings on supply of certain models.

Nissan said it is reducing production of its best-selling Note compact car, featuring new hybrid technology, at its Oppama plant in Kanagawa prefecture, Japan.

It is also making short-term output adjustments at its North American operations, including three non-production days on the truck line at its Canton, Mississippi, facility..

"We are mitigating the impact if the semiconductor shortage and doing our best to minimize the negative impact," Nissan Chief Executive Makoto Uchida said during a livestreamed media briefing.

IMPROVED OUTLOOKS

Nissan, which is pulling back from the global expansion pursued by ousted chairman Carlos Ghosn, on Tuesday cut its operating loss forecast by more than a third helped by China sales and cost cuts.

It now expects an operating loss of 205 billion yen ($1.96 billion) in the year ending March 31 compared with an earlier 340 billion yen loss prediction.

Nissan's revised operating loss is smaller than a Refinitiv SmartEstimate of a 230.1 billion yen loss drawn from analysts.

China's auto market grew by 6.4% in December as it continued to lead the industry's recovery from the COVID-19 pandemic.

Mitsubishi Motors (OTC:MMTOF) Corp, a junior partner in the three-way alliance that includes Nissan and Renault SA (OTC:RNLSY), also cut its operating loss forecast on Feb. 2.

The Nissan-Renault pair were among the weakest global automakers going into the coronavirus crisis, lacking a clear plan for using their alliance to emerge from the slump and share the burden of investing in electric vehicles and other technology.

The latest full-year operating profit forecast from Honda, which is also benefiting from the demand rebound in China and elsewhere, is for 520 billion yen, up from the 420 billion yen profit it predicted three months ago.

($1 = 104.6200 yen)

Honda and Nissan to sell a quarter of a million fewer cars because of chip shortage
 

Related Articles

Baidu beats quarterly revenue estimates
Baidu beats quarterly revenue estimates By Reuters - May 26, 2022

(Reuters) - Baidu Inc (NASDAQ:BIDU) surpassed quarterly revenue estimates on Thursday as a resurgence of COVID-19 cases in China and accompanying restrictions drove up demand for...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email