Due to the increase in demand as well as cost cuts, Asian carmakers expect to raise quarterly earnings significantly. Toyota Motor Corp. is predicted to be the exception as it's likely to revert to an operating loss. After the financial crisis that wreaked havoc on the car industry last year, the first three months of 2010 saw sales increase globally.
Consumers were quick at taking advantage of government incentives that sought to revive the demand. According to consensus estimates from Thomson Reuters, operating profits at Honda Motor Co. and Nissan Motor Co. have swung back into the black in their latest January-March quarter.
On the other hand, Toyota doesn't share the improved outlook. It posted profits in the previous two quarters, but for the latest quarter, it is forecasted to have an operating loss.
However, this loss is seen to be less than a third of last year's, which was the height of the global crisis. Meanwhile, Hyundai Motor Co. is on track to continue its winning streak, with a near quadrupling of its first-quarter profits.
This good showing is attributed to Hyundai's immense presence in the Chinese and Indian markets, as well as the carmaker's firm push into the US. China's biggest automaker, SAIC Motor Corp., is also expected to report a first quarter profit that has more than quadrupled as it benefited from Beijing's policy incentives.
Analysts are optimistic about SAIC's outlook for the rest of the year based on the strong automobile demand, particularly in second- and third-tier cities.