Active Investing in Japan

General Motors’ Asia Pacific president Rick Brown at the Tokyo Motor Show on Wednesday said comparing GM to Toyota is a waste of time and energy — ?????????????????????????????? — referring to the much talked about point that Toyota could surpass GM in global vehicles sold (volume) annually, as early as this year. GM’s Brown said what’s most important is to focus on design and production, as well as satisfying dealers. Have to agree with Brown on that point, but his attitude of something like who cares, “Toyota may pass GM” or “it may not pass GM”, seems inappropriate, especially at the Tokyo Motor Show. continue reading…

Volkswagen has applied to delist from the Tokyo Stock Exchange, citing low trading volume and its plans to also delist from some European exchanges. This continues the TSE’s trend of losing (and not being able to replace, at least for the time being) overseas listings. There will now be only 25 foreign companies listed on the TSE. 1991 was the peak year for overseas listings when there were over 100. Among the remaining American firms with listings the last time I checked are AFLAC, AIG, Bank of America, Boeing, Dow Chemical, JP Morgan Chase and Merrill Lynch.

Next January, the Tokyo Stock Exchange will actually gain a new listing, as Citigroup plans to list shares as part of its broader Japan expansion strategy in conjunction with its acquisition of Nikko Cordial. In fact, Citi is planning a share exchange for the remaining 32% stake of Nikko Cordial that it doesn’t already own, in effect making it the first company to take part in a triangular merger, an acquisition method which has only been allowed since May of this year. Now that Citi has broken the ice, there’s speculation more triangular mergers are on the horizon.

1st-half fiscal 2007 sales of new autos are down 8.1% year-over-year to 2.48M autos. Backout mini-car sales and the figure stands at -8.8%. This is reportedly the lowest level in 33-years and the first time in four-years for mini-cars to have suffered a decline in sales (-6.8% y/y to 896,334 units sold). Ex-mini cars, the best performers were Mitsubishi +13.2% to nearly 37,000 autos sold and Lexus +23.5% to 15,390.

In the mini-car segment, Daihatsu (JP: 7262) controls 32% of the market vs. 30.7% for Suzuki (JP: 7269).

Separately, Toyota (NYSE: TM) (JP: 7203) says internal forecasts show this year will be the first time overseas unit sales have exceeded domestic sales, as overseas units sales are expected to total more than 4.3M autos (est. total sales of 8.6M).

Check out the “Nissan GT-R Countdown!” if you haven’t already.

Let the Nissan GT-R countdown begin.

Nikkan Kogyo reports Nissan (NSANY) (JP: 7201) CEO Carlos Ghosn will unveil the highly anticipated Nissan GT-R on Oct. 24 at the Tokyo Motor Show press day. Nissan is now taking pre-orders. The GT-R is said to be priced from the upper 7 million yen (approx. US$65,000+ at 115/1) range. Nikkan Kogyo notes Honda (HMC) (JP: 7267) and Toyota (NYSE: TM) (JP: 7203) are also investing in sports cars and Japan’s Big-3 attempt to take control of the domestic sports car market from overseas sports car makers. The GT-R is making a come back after it was last sold on a limited basis in early 2002. Sales will begin in Japan from December. Nikkan Kogyo mentions the GT-R carries on the “Skyline” pedigree (scroll down the linked page for video clips) but will be sold worldwide as “Nissan GT-R” in order for Nissan to build brand recognition. Ordinary shares of Nissan were last up 1.7% to 1,139 yen in early trading as the broader market is in rally mode.

Without doubt Toyota is disappointed (and probably a lot of other emotions) about Jim Press leaving for Chrysler. Press — who has been with Toyota for 37 years, is the highest ranking Toyota executive in the U.S. and the first American on Toyota’s board — is resigning effective September 14. “I was looking forward to him playing a bigger role as a member of our management team, so I am sorry to see him leave. I would like to express my heartfelt gratitude for all he has done for Toyota,” commented Toyota president Katsuaki Watanabe in a statement.

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A couple days ago we looked at Lexus — in short, it plans to target the “prestige luxury” segment where some car buyers have a fleet of cars and assets in excess of $5m — prompted by an article in the WSJ. Since then, reports out of the U.S. show further housing weakness, how subprime home mortgage troubles could be spreading to auto loans and we see that consumer confidence dropped to its lowest level since November. This does not bode well for automakers.

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The Wall Street Journal has a nice Page One piece on Lexus, about how it is respected for its quality, but not a top choice, or even a choice at all, among America’s wealthy — some who have a fleet of cars. It looks like this will change however, as Toyota is readying to break into the “prestige luxury” segment. And how about the stock of parent-Toyota?

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