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Japan's Hitachi half-year net profit down 67.8%
by Staff Writers
Tokyo (AFP) Nov 1, 2011

Japan auto sales jump 28% in October
Tokyo (AFP) Nov 1, 2011 - Japan's domestic sales of new cars, trucks and buses jumped 28.3 percent in October, reflecting the industry's continued rebound from the huge disruption sparked by Japan's quake and tsunami.

Sales, which started to pick up in September, surged in October to 247,927 vehicles, the Japan Automobile Dealers Association said Tuesday.

The figures do not include sales of mini vehicles -- which have an engine capacity of 660 cc or less -- and reflect a low basis of comparison from the same period a year earlier, when state subsidies for the purchase of environmentally friendly vehicles ended.

Sales had been slowing since then, the drop exacerbated by the March 11 earthquake and tsunami, which damaged factories and crippled supply chains, forcing the likes of Toyota to shutter plants and halt production.

Sales dived 50 percent in April and 38 percent in May, as consumer demand took a hit.

Japanese high-tech firm Hitachi on Tuesday said its net profit fell 67.8 percent in the six months to September, hit by the impact of the March earthquake and a strong yen.

Hitachi's net profit came to 50.9 billion yen ($652 million) in the April-September first half, which was still slightly higher than a recently upgraded profit forecast of 50.0 billion yen. Operating profit fell 21.8 percent to 170.6 billion yen.

"Although we pushed with cutting materials and other costs, (the profit) came below the year-before level due to the impact of the Great East Japan Earthquake and the strong yen," the company said in a statement.

Sales edged up 1.6 percent to 4.57 trillion yen.

The impact of the strong yen is undermining Hitachi's efforts to win orders for large infrastructure projects overseas as new rivals from emerging markets become increasingly competitive, Hitachi president Takashi Miyoshi said.

"In price competition overseas, the strong yen is a huge disadvantage," he told reporters.

On a quarterly basis, Hitachi's net profit fell 33 percent from a year earlier to 48 billion yen in July-September.

Like many other firms, Hitachi -- whose products range from microchips to nuclear power equipment -- reported damage to its production facilities and electricity supply problems after the March 11 quake and tsunami.

The recovery of Japanese firms is threatened by the strong yen and the expected impact from the recent flooding in Thailand, which has hit manufacturers' production facilities and created a component supply shortage.

"If the yen further strengthens, we wouldn't be able to keep producing what we'd like to produce in Japan," said Miyoshi, adding that he welcomed the Japanese government's yen-selling intervention Monday.

Monday's yen-selling intervention came after the unit hit a fresh post-World War II high versus the dollar. Tokyo blames the rise on "speculators" and says the yen's current levels do not reflect Japan's economic reality.

Japan's manufacturers have staged a rebound since the March disasters that left around 20,000 dead or missing, triggered a nuclear crisis and shattered crucial supply chains, heavily disrupting Japanese industry.

Such efforts are being compromised by the strength of the Japanese currency, which could force more firms to shift jobs and production abroad in a further blow to the nation's slow economy.

Hitachi left unchanged its net-profit projection of 200 billion yen for the full year to March 2012, down 16 percent from a record 238.87 billion yen last year.

Operating profit is forecast to fall 10 percent to 400 billion yen on two percent sales growth to 9.5 trillion yen.

July-September operating profit fell nine percent to 118.2 billion yen.

Sales rose three percent to 2.4 trillion yen.

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Thailand floods disrupt Honda's America production
Detroit, Michigan (AFP) Nov 1, 2011 - Japanese automaker Honda will slash production at its North America plants by 50 percent starting on Wednesday as suppliers in flood-ravaged Thailand are unable to deliver parts.

"A number of Honda suppliers in Asia currently are unable to maintain parts production, which is disrupting the flow of parts to our production operations in North America," the company said in a statement Monday.

Most of the parts for Honda and Acura vehicles are sourced from North American suppliers, but "a few critical electronic parts" come from Thailand, it said.

Starting on Wednesday, the company will cut in half its automobile assembly at all six of its plants in Canada and the United States for at least one week.

"It is anticipated that this situation will require adjustments for the next several weeks," said Honda spokesman Ed Miller.

"Subsequent adjustments will be announced as they are determined based on the parts supply situation," he added.

The release of the 2012 Honda CR-V could potentially be delayed by several weeks, the company said.

No layoffs are planned at any of Honda's North American facilities as a result of the disruption, the company added.

The Honda Civic is one of the best-selling cars in Canada and the United States.

Honda, like other automakers, was already struggling to crawl back from the devastating earthquake and tsunami that struck Japan in March and caused extensive damage to its industrial base.

Earlier on Monday, Honda said net profit for the fiscal first half plunged 77.4 percent year-on-year, as it grappled with the impact of the earthquake and a strong yen.

The automaker also held off giving an earnings forecast for the year ending March 2012 as it continued to assess the impact on its operations of Thailand's worst flooding in decades.

Toyota has also announced it will scale back production because of the Thailand flooding, including by temporarily cancelling overtime and Saturday production.

Unusually heavy monsoon rains have flooded large swathes of northern and central Thailand over the last three months, leaving at least 381 people dead and damaging millions of homes and livelihoods.


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China manufacturing growth slows in October
Beijing (AFP) Nov 1, 2011
Manufacturing activity in China and other Asian economies remained weak in October, surveys showed Tuesday, as US and European economic woes hit demand for clothes, shoes and electronic gadgets. China is heavily reliant on exports to drive its economy - the second largest in the world - and the downturn in key US and European markets is already hurting manufacturers who employ millions of ... read more

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