Sunday, January 28, 2007

Japan carmakers to ride sales rise

By Chang-Ran Kim, Asia auto correspondent

TOKYO (Reuters) - Japan's top two carmakers, Toyota Motor Corp. and Honda Motor Co., are likely to post double-digit profit growth for the latest quarter on strong sales and a weaker yen, while third-ranked Nissan Motor Co. is seen stalling on tepid demand.

The domestic Japanese market offered a mixed bag of sales data for October-December, with popular 660cc minicars lifting Honda while reining in Toyota, but both continued to increase sales in the more profitable Western markets.

Solid vehicle exports from Japan to meet voracious demand overseas also worked in Japanese automakers' favor as the yen slipped further, especially against the euro. "We can't expect the kind of big boost from the dollar's rise as we did in the first half, but the euro continued to strengthen," said Atsushi Kawai, auto analyst at Mizuho Investors Securities. "The rise in raw material costs also seems to have abated, so the third quarter is likely to be solid."

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