Mitsubishi Fuso, (above) which is 65 percent owned by DaimlerChrysl" />

Issue: Mar 2004


Asia Report



Japanese Truck Sales Spike

by AI Staff

The race to buy before new diesel emissions regulations take effect sends heavy truck sales to an all-time high.








 
Mitsubishi Fuso, (above) which is 65 percent owned by DaimlerChrysler AG, is looking at projected earnings in excess of $285.7 million in 2003. Hino (below) is looking at an eight percent sales increase in 2004.
 

Fueled by tighter NOx and particulate emission standards in Tokyo, Yokohama and surrounding areas, to be followed by new national standards this autumn, Japanese truckmakers reported a 51 percent increase in sales last year to a six-year high of 248,397 units.

Demand rose more than 50 percent producing growth in all truck segments light (2 to 6 tons gvw) medium (6 to 16 tons) and heavy duty (more than 16 tons) with sales in the medium-- and heavy-duty segments topping 110,000 for the first time since 1997.

And increased demand, both in Japan and overseas, has resulted in an improved earnings picture.

Of the nations four medium- and heavyduty truck manufacturers (Hino Motors Ltd., Isuzu Motors Ltd., Mitsubishi Fuso Truck & Bus Corp. and Nissan Diesel Motor Co. Ltd.), all are forecasting profits in the fiscal year ending this March.

Hino, which reported mid-term net profits of $132.8 million, is projected to achieve earnings of $257.1 million for the full fiscal year on 18 percent higher sales of $9.5 billion.

Isuzu is expected to report net income of $380.9 million, recovering from a record net loss of $1.4 billion in fiscal 2003, on four percent higher sales of $13.3 billion. In fiscal 2003, sales totaled $12.9 billion.

Meanwhile, Mitsubishi Fuso reported half-year income of $128.6 million, up sixfold over the same period in fiscal 2002, on 26 percent higher sales of $4.1 billion. For the full fiscal year, the Tokyo-based truckmaker, now owning 65 percent by DaimlerChrysler AG, is projecting earnings in excess of $285.7 million.

Even Nissan Diesel would be in the black if it had not taken a special restructuring loss of $571.4 million. As it is, the Tokyo-based affiliate of Nissan Motor Co. and Renault is expected to register a net loss of $419 million on 17 percent higher sales of $4.2 billion.
 
Against this backdrop, Isuzu and Mitsubishi Fuso finished a strong one, two with calendar 2003 sales of 76,933 and 73,447 units. They were followed by Hino at 45,156, Nissan Diesel at 21,345 and Toyota Motor Corp. at 18,614 (see Table 3). Isuzu, owning 12 percent by General Motors Corp., registered the largest percentage growth of 63 percent.

Analysts attribute the years upturn to changes in the nations regulatory environment with respect to NOx and particulate emissions. New, stricter regulations for trucks over 2.5 tons gvw are scheduled to take effect in October 2004. These follow tighter NOx and particulate regulations in Tokyo, Yokohama and surrounding areas which took effect last October and subject truckowners to fines for failing to equip their vehicles with particulate filters.

The Tokyo regulations require truck owners to reduce NOx and particulate emissions to 4.5 g and 0.25 g per kW/hr. The new national standards will require NOx and particulate matter emissions to be lowered to 3.38 g and 0.18 g per kW/hr. Then again in October 2006, the national standards will be tightened further to 2.0 g for NOx and 0.027 g for particulates.

Because of the tighter regulatory environment, analysts feel that demand for medium and large trucks will hold steady at around 100,000 units for the next two years, then fall back again to 70,000-unit levels in 2006 unless the Japanese economy recovers by then, in which case demand would likely hold at current 100,000-unit levels.

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