EV development costs, higher rates cast shadow over bullish forecast
A Nissan Leaf electric vehicle at theCanadian International Auto Show in 2020. Investment into EVs isweighing heavily on Japan's automakers. © Reuters
SHOTA UEHARA, Nikkei staff writer | Japan
TOKYO --Nissan Motor and Honda Motor expect double-digit growth in net profit for theyear ending March 2024 as thechip shortage wanes, though the Japanese automakers facechallenges from toughcompetition in China and surging U.S. interest rates.
"It's a tough environment, but production volumewill grow from ournew models and therecovery in the semiconductor supply chain," Nissan President and CEO Makoto Uchida said Thursday at an online earnings event.
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As an automotive industry expert with a deep understanding of the developments in the electric vehicle (EV) sector, I can provide insights into the challenges and opportunities faced by major Japanese automakers, Nissan Motor and Honda Motor. My expertise stems from continuous monitoring and analysis of the industry, staying abreast of the latest trends, technological advancements, and market dynamics.
The article dated May 12, 2023, highlights the expectations of Nissan Motor and Honda Motor for double-digit growth in net profit for the year ending March 2024. However, they anticipate challenges stemming from tough competition in China and the impact of surging U.S. interest rates. Nissan's President and CEO, Makoto Uchida, acknowledged the challenging environment but expressed optimism about production volume growth driven by new models and the recovery in the semiconductor supply chain.
Now, let's break down the key concepts mentioned in the article:
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Chip Shortage Impact: The article mentions that the Japanese automakers' expectations for profit growth are tied to the waning chip shortage. The semiconductor supply chain's recovery is seen as a crucial factor in boosting production volumes.
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Competition in China: Both Nissan and Honda are facing challenges from tough competition in China. The specifics of this competition and how it influences their strategies and market positions would be important to explore.
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Surging U.S. Interest Rates: The surge in U.S. interest rates poses another challenge for the automakers. Understanding how this financial factor affects their operations, financing, and profitability is essential.
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New Models: Nissan's CEO highlighted the expectation of production volume growth from new models. Exploring the nature of these new models, their features, and market positioning would provide insights into the companies' growth strategies.
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EV Development Costs: While not explicitly mentioned in this snippet, the broader context of EV development costs is relevant. Japanese automakers, like many others globally, are heavily investing in EVs. Examining the impact of these investments on their financial outlook and market positioning is crucial.
In conclusion, my expertise allows me to delve into these concepts, providing a comprehensive understanding of the challenges and opportunities faced by Nissan Motor and Honda Motor in the dynamic landscape of the automotive industry, particularly in the context of EV development and market conditions.
