latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/nissan-honda-have-long-road-to-recovery-after-pandemic-59691279 content esgSubNav
In This List

Nissan, Honda have long road to pandemic recovery

Case Study

A Sports Team Navigates Business Through Disruptive Times

Case Study

A Sports League Maximizes Revenue from Media Rights

Blog

Japan M&A By the Numbers: Q4 2023

Blog

Essential IR Insights Newsletter Fall - 2023


Nissan, Honda have long road to pandemic recovery

The big seven Japanese automakers have faced a challenging second quarter with a global slump in demand and disruptions to supply chains from the COVID-19 pandemic. The depths of the outlook can be seen in Nissan Motor Co. Ltd.'s forecast that "global industry volume will decrease 16% year over year" in the 12 months to March 2021, with Nissan's sales "expected to decline by 16.3%." It has also canceled its dividend for the year. 

Both Nissan and Mitsubishi Motors Corp.'s stock prices fell following their results, with a drop of 10.4% and 12.6%, respectively, on the day after their earnings, according to S&P Global Market Intelligence data.

Panjiva's analysis of company financial filings shows that the industry is still a long way from being back to normal. Global production across the seven big automakers increased 78.9% in June compared to May but was still 26.1% lower than a year earlier. 

Exports from Japan are suffering from a longer-term downturn and fell by 51.6% year over year in June. That was led by an 83.1% drop in shipments linked to Nissan while Mitsubishi's fell by 67.1%. The outlier was Suzuki Motor Corp. with a 38.9% improvement while Honda Motor Co. Ltd. shipments only declined by 8.8%.

SNL Image

Looking into the third quarter, most majors face tough prospects. Toyota Motor Corp., for example, has requested price reductions from its major suppliers, the Nikkei Asian Review reports, while Mitsubishi Motors is rationalizing its manufacturing capacity in Japan over the next three years to cut costs. The companies also face added complications from the implementation of USMCA from July 1 which may require a longer-term retooling of supply chains, as outlined in Panjiva's research of July 16.

In the meantime, Panjiva's data shows there has also been minimal reloading of manufacturing capacity in Mexico with components. Mexican imports of parts associated with Honda and Nissan will still only at 81.7% and 82.7%, respectively, of their year-earlier level in June. Toyota and Mazda Motor Corp., meanwhile, have been somewhat more aggressive with shipments down by 45.4% and 51.3%, respectively, though clearly still have a long way to go to return to business-as-normal levels.

SNL Image

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.