China slowdown to weigh on results, outlook of Nissan, rivals

Wed Jul 25, 2012 5:33am EDT
 
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By Yoko Kubota and Hyunjoo Jin

TOKYO/SEOUL (Reuters) - Sputtering growth in China, the world's largest auto market, is clouding the outlook for Asian car brands and will weigh on results due for release in coming weeks.

Auto sales in China grew just 2.9 percent in the first half of 2012 after posting anemic growth of 2.5 percent in 2011, setting the country up for its slowest back-to-back years of growth since the market took off in the late 1990s.

In 2010, growth had been a blistering 32 percent.

Nissan, which has a relatively high exposure to the China market compared to its Asian peers, is expected to report a fall in profit for the April to June quarter.

Domestic rivals, including Toyota and Hyundai are expected to report rises in profits despite the sharp slowdown in growth in the Chinese auto market.

Nissan (7201.T: Quote) relies on China for 30 percent of its global sales - a relatively high share on a par with Volkswagen (VOWG_p.DE: Quote) and General Motors (GM.N: Quote).

According to six analysts surveyed by Thomson Reuters I/B/E/S, Japan's No. 2 automaker will post a 4-percent drop in quarterly net profit when it reports its figures on Thursday.

A major factor in the decline is a stronger year-earlier performance. Nissan bounced back more quickly than its domestic rivals from the supply disruptions that followed the Japan's earthquake and tsunami in March 2011.   Continued...

 
A Nissan logo is seen on the car maker's booth during the first media day of the Geneva Auto Show at the Palexpo in Geneva, March 6, 2012. REUTERS/Valentin Flauraud