June 13, 2014 4:32 am JST

Japan carmakers seen growing margins without yen's help

TOKYO -- Leading Japanese automakers are expected to secure higher profit margins than their American rivals in fiscal 2014, with Toyota trailing only BMW in a new ranking.

     The ranking employs data from U.S. research company FactSet to project margins at the 10 automakers that logged the highest net profits for fiscal 2013. To minimize the impact of different accounting rules and tax systems, earnings before interest and taxes are used.

     Toyota will likely boast a margin of 9.72% -- outclassing the 7.98% of Daimler, whose main brand is Mercedes-Benz.

     BMW, at 10.6%, is seen leading the pack as the sole company to top 10%. It ranks fourth in projected profit.

     Unlike those two German players, Toyota does not focus primarily on luxury vehicles. But the Japanese automaker handily beats U.S. peers General Motors and Ford, whose margins are forecast to languish below 4%. Germany's Volkswagen, with global sales volume comparable to Toyota's, is seen at 6.21%.

     Even in the absence of a tailwind from the softer yen, margins are likely to improve this fiscal year at Toyota, Honda and Nissan.

     Attractive features like high fuel economy appear to be helping the makers of Japanese cars. Discounts on Toyotas and Hondas average about $2,000 in the U.S. -- less than the industrywide average of more than $2,500.

     Meanwhile, margins at GM and Ford will likely fall on the year, in part because of a greater reliance on European operations compared with Japanese automakers. GM may also suffer from the lingering effect of mass recalls.

(Nikkei)