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Tips For Investors: Nissan VS Toyota?


 

 

The year of 2011 was a good one for Nissan Motor Co., especially in terms of its unofficial competition with Toyota.
Nissan and Toyota are tough rivals in the global car market. On the face of it, there is nothing to discuss here. Toyota looks the frontrunner. It really is. However, according to Masterforex-V Academy experts, last year was especially favorable for Nissan.
 
2011: Outlook
 
Last year slightly chanced the balance of powers between the 2 motor giants. Let’s have a look at last year’s most prominent events for Nissan:
1.       Nissan became Japan’s 2nd biggest car manufacturer after Toyota.
2.       Nissan considerably improved its standing in the global rating while Toyota lost a bit of its ground.
3.       Even though Toyota enjoyed the status of some of the most precious car brands in the «BrandZ Top 100» rating ($24,4M), Nissan entered the TOP 5 car brands for the first time in history ($10.1M).
4.       In late 2011 Nissan showed such a considerable production increase that it easily outpaced all the other Japanese car manufacturers. At the same time Nissan became the most popular car brand in Russia (Toyota occupied the 8th place).
In 2011 Nissan Juke was put in the list of the world’s most beautiful cars along with Aston Martin Rapide, AudiA7, CitroenDS3, Ferrari 458 Italia. There was no Toyota among them.
 
Nissan and Toyota: Car Sales
If to consider the sales of the Renault-Nissan alliance, over 8 million cars were sold last year (+10,3%), which became a kind of a record and a pleasant surprise. During 2011 the alliance’s share in the global car market increased form 10,3% up to 10,7%. Nissan sold 4,67M out of the mentioned 8M cars (+14%). At the same time, Toyota sold much more - 7,95N cars. However, it is 5,6% less than sold in 2010.
 
2011 was Nissan’s best in terms of sales in Europe (+25%). That was a considerable increase in Russia (+74%), the UK (+11%) and France (+31%) against the background of economic instability when most car manufacturers saw a sales decline. As a result, Nissan’s share in the European market increased up to 3.7%. However, the company is fairly ambitious: it is planning to become Europe’s most popular Asian car brand by 2016.
 
Nissan was affected by last year’s natural disasters less than other Japanese car manufacturers.
 
Financial performance 2011
 

 

 

 

 

It should be noted that the Japanese financial year ends in March and its results are revealed in summer. That is why while considering Nissan’s financial performance we will be operating the data for April-December 2011:
 
·         Nissan’s net income shrunk by 7,75% down to $3,47B
·         Its proceeds increased by 4,31% up to 87,3B
·         Its operating profit dropped by 4,7% down to $5,55B
·         The sales volume increased by 4,3% up to $86,95B
 
At the same time, 2011 was a terrible year for Toyota:
·         Its net income collapsed by 57,5% down to just $2,1B
·         Toyota’s proceeds dropped by 10,2% down to $168B
 
Car sales forecasts for 2012

 

 

 

 

Nissan is expected to boost its sales by 7,7% up to $124B. Its net and operating income will probably shrink by 9,2% and 5,1% down to $3,8B and $6,65B correspondingly.
 
In general, the stock market is currently showing a positive reaction to the news form Nissan, which turns into a rally of the company’s stock. This makes Nissan ambitious and confident about its future. Nissan managers are planning to boost the company’s operating profit margin by 8% within 5 years.
 

 

 

 

 

According to the Portfolio Investments Department of Masterforex-V Academy, the stocks of Toyota and Nissan are currently bullish, with positive long-term forecasts.
 
Both the companies are expected to show a sales increase in Q1 2012. However, a slight slowdown in sales is anticipated in Q2 2012. That is why Masterforex-V Academy experts recommend waiting for a major correction prior to purchasing the stocks.
 
Nissan’s Problems
 
Masterforex-V Academy experts singled out a number of reasons why Nissan is currently experiencing some problems:
 
Natural disasters in 2011.   The earthquakes and tsunamis in Japan as well as the floods in Thailand severely damaged Nissan’s production.
 
Global economic slowdown in 2012. The global economic slowdown starts affecting car markets worldwide. This year Asian and European car markets are expected to see a further slowdown while the US demand for new cars will grow by 5-8%. However, Toyota is far more popular with Americans than Nissan.
 
Stronger Yen. At this point, USDJPY is around 83, which makes Japanese autos costlier for foreign buyers, thus affecting the exporters’ profits. Nissan is a major exporter (57% of the company’s total production volume was exported in 2011).
 
Alliance with Renault. The thing is that not so long ago Moody’s Investors Service downgraded Renault’s rating. Renault owns more than 43% of Nissan’s stock while Nissan owns 15% of Renault’s stocks. Therefore, the ratings of both the car manufacturers are closely correlated.
 
Quality issues. No car can serve forever. However, more and more car manufacturers start calling back their products because of mere or hidden malfunction. Nissan is no exception. Not so long ago it called 250.000 cars because of a fuel leak issue.
According to J.D.Power’s car reliability rating (based on the amount of breakdowns per 100 autos under 3 years), Lexus was the most reliable car. Toyota came 3rd while Nissan was only number 17.
Not so long ago Ecology Center tested the cabins of multiple car models for toxicity and compared the results. As a result, Nissan Tiida found itself number 4 in the list of the 10 most toxic cars. However, Nissan Cube was recognized the 4th least toxic car. So, as we can see, it depends on a particular car model.
 
Prices. Toyotas are relatively expensive but Nissans are no so cheap as well.
 
The top managers at Nissan Motor are aware of these problems and promise to improve the situation.
 
Nissan’s Prospects
 
The top managers of Nissan Motor feel confident in the future due to numerous factors:
·         More substantial investments in the Nissan and Infiniti brands
·         Introducing innovative technologies
·         Expanding the Nissan family
·          Making environmentally friendly and economical cars
·         Improving the design
·         Improving the ratio between the price and the quality
·         Starting the production of low-priced cars
·         Conquering new markets
·         Expanding domestic sales
·         Cooperating with other car brands around the globe.
 
 
All these factors are expected to help Nissan Motor expand is share in the global car market up to 8% within the next few years.
 
The bottom line: Both Nissan and Toyota are fairly good and reliable cars. Nissan has shown considerable progress so far, which means the competition between the 2 Japanese car brands will only get tougher. This is good for both the car manufacturers and the consumers of their products. Competition stimulates progress and reasonable pricing.
 
Market Leader and Masterforex-V Academy would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:
 
Will Nissan manage to catch up with Toyota?

 

 

 

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