Market Monitor- Focus on automotive performance - Japan

Market Monitor

  • Japan
  • Automotive/Transport

1st October 2015

Japanese automotive businesses´profit margins have generally improved, mainly due to higher sales in North America.

  • The Japanese automotive sector faces decreasing domestic sales due to the tax hikes implemented in recent years as well as structural issues such as a decrease in younger population. While overseas sales are negatively affected by the current slowdown in China, turnover is increasing in North America, helped by a weaker yen exchange rate.

 

  • Japanese automotive businesses´profit margins have generally improved, mainly due to higher sales in North America. However, global price competition is increasing for Japanese manufacturers, especially in the car parts segment.

 

  • Capital requirement is high in this sector, but in general Japanese automotive businesses are not overly indebted. Due to the satisfying business performance banks are generally willing to provide loans with good financing conditions, which is helped by low interest rates. Additionally, the Japanese government is encouraging banks to support companies with strong financing needs.

 

  • The average payment duration in the Japanese automotive industry is 30-60 days for car retailers and 60-90 days for wholesalers and manufacturers. Payment behaviour in this sector has been very good over the past two years. The number of protracted payments, non-payments and insolvency cases is very low, and it is expected that there will be no deterioration in the coming months as the businesses environment is expected to remain stable and banks are willing to lend.

 

  • Due to the generally benign indicators we assess the credit risk and business performance of the automotive sector as stable, and our underwriting stance continues to be very open for large manufacturers and open for car parts suppliers and wholesalers. However, in those latter segments we have adopted a more cautious approach for smaller business, which often have weaker financials than larger businesses and are more vulnerable to sudden changes in the market sentiment.

Related Documents

Download
Market Monitor October 2015

1014KB PDF

Related content

Country Report Japan 2015

Report

Despite its growing economy, Japan faces major demographic challenges. There is an urgent need to make the labour market more flexible to achieve a sustainable rebound and boost economic performance.

Market Monitor - Focus on the steel industry - Japan

Report

Overall, Japanese steel production increased 3.1% year-on-year in 2013. In the first half of 2014 domestic steel orders increased 2.8%, while export orders fell by 9.4%.

Payment Practices Barometer Japan

Report

43.8% of Japanese respondents said that the biggest challenge to business profitability was falling demand for their products and services, the highest percentage of all Asia Pacific nations surveyed.

Products

News and Publications

Legal and Privacy

LinkedIn YouTube

© Atradius N.V. 2004 - 2024

Disclaimer

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.