Japanese and Korean carmakers expect future improvements in sales, profits

Japan’s automakers are expecting big leaps in their quarterly profits as production levels, which were held down by last year’s earthquake and flooding in Thailand, are ramped up. The increases in production are expected to set the stage for a substantial recovery in the coming year. Many analysts have already raised their profit forecasts for Japan’s top three carmakers in 2012-13. The forecasts are based upon a weaker yen and a robust recovery in the U.S. market. Despite the expected resurgence of its Japanese counterparts, South Korean rivals Hyundai Motor Co. and its affiliate, Kia Motors Corp., are also expected to post solid gains for the first quarter of this year. Hyundai and Kia posted market recovery in the U.S. and circumvented the downturn in Europe, which helped offset low sales in the domestic market. The two South Korean carmakers are expected to benefit from the shift in the preference of U.S. consumers to compact cars, as a result of higher oil prices. In South Korea, the two companies are expecting record-high profits in the second quarter due to seasonal demand and the launching of new models: Hyundai’s Santa Fe SUV and Kia’s K9 luxury sedan. (April 20, 2012)