* Weaker yen, U.S. growth aid recovery
* Korean automakers gain from U.S. consumer shift
By Chang-Ran Kim and Hyunjoo Jin
TOKYO/SEOUL, April 20 Japanese automakers are
expected to show a big improvement in quarterly profits as they
ramp up production held down last year by disasters at home and
in Thailand, setting the stage for a convincing recovery in the
South Korean rivals Hyundai Motor Co and Kia
Motors Corp, are also expected to post solid
earnings for the January-to-March quarter, defying concerns
about competition from resurgent Japanese automakers thanks to
better-than-anticipated sales overseas.
Many analysts have raised their 2012/13 profit forecasts for
Japan's top three automakers to reflect a weaker yen since the
central bank's monetary easing in February and a more robust
recovery in the profitable U.S. market.
"After struggling with the impact of natural disasters in
2011/12, we generally expect assemblers to produce solid
earnings this year," Goldman Sachs analyst Kota Yuzawa wrote in
Toyota Motor Corp and Honda Motor Co had a
dismal 2011, dominated by supply chain disruptions from last
year's earthquake and tsunami in eastern Japan, the yen's record
strength and renewed output cuts from October due to historic
flooding in Thailand.
As Toyota and Honda lost market share around the world,
Nissan Motor Co shined as Japan's No.2 automaker
recovered more quickly from both natural disasters and took more
aggressive and speedy steps to offset currency losses by
importing more parts.
The final January-March quarter for Japan's top three
automakers is expected to show a surge in earnings, but cap a
year of double-digit drops in operating profit for Toyota and
Honda, while Nissan is seen managing a slight rise for the year.
As automakers announce their results in the coming weeks,
the focus will be on the scope of profit recovery they forecast
for the year ahead, analysts said.
"Currency assumptions will probably be neutral to positive,
while sales growth should be huge as they bounce back from the
disasters," said Credit Suisse analyst Kunihiko Shiohara.
"On the other hand, there should be a natural rise in costs
that were held down last year, so the question will be what kind
of net profit gain they'll forecast," he said, noting that
Japanese automakers tend to provide conservative estimates.
SOUTH KOREANS STILL ON A ROLL
Hyundai and its affiliate, Kia, rode the U.S. market
recovery with sales gains there while also bucking the downturn
in Europe, which helped offset weak domestic sales.
"Once again, there was no observable zero-sum game pattern
between Korean and Japanese brands," Credit Suisse said in a
Hyundai's U.S. chief said last week the automaker could see
its sales top 700,000 vehicles in the world's second-biggest
auto market this year, above its previous target of 675,000
The South Korean duo could especially benefit from a shift
by U.S. consumers to compact cars due to rising gasoline prices
because Japanese rivals import their smallest cars from Japan,
making them less price-competitive at current exchange rates, JP
Morgan analyst Kohei Takahashi said.
Hyundai and Kia are headed for record-high profits in the
current April-June quarter, driven by seasonal demand and new
model launches such as Hyundai's Santa Fe SUV and Kia's K9
luxury sedan in South Korea, analysts said.
MARUTI TURNS CORNER IN INDIA
Top Indian automaker Maruti Suzuki India Ltd is
expected to post its first rise in revenue in three quarters
after a torrid financial year for the carmaker as Tata Motors
Ltd continues to see revenue and profit surge on the
back of strong sales at its Jaguar Land Rover unit.
Maruti has posted two consecutive quarters of falling
profits as the car maker struggled with an industry-wide sales
slowdown and the impact of widespread labour unrest at its
factories in 2011.
Car sales in India grew an annual 13.4 percent in the
January-March quarter and revenues are seen rising across the
industry, but profits are expected to fall as increased input
costs and a weakened rupee curb operating margins.
"Year-on-year volumes are up and that will reflect in higher
revenues, but profits will be lower as margins are hit by around
200 basis points, mainly due to unfavourable currency moves,"
said Joseph George, an auto analyst at IIFL Securities in
Indian automakers import a substantial number of parts and
machinery. The rupee fell 13.5 percent in the year to March 31.
Maruti, 54.2 percent owned by Japan's Suzuki Motor Corp
, saw sales rise in January for the first month since
May 2011 and is seen posting a 14.5 percent rise in revenue, but
a 14.4 percent slide in profit.
Tata, whose sales jumped more than 20 percent in the quarter
due to continued demand for its Jaguar and Land Rover vehicles,
is seen posting a 20 percent rise in profit even as the
performance of its domestic business lags.
The British luxury brands accounted for more than 90 percent
of profit in the previous quarter.
Overall car sales in India rose just 2.2 percent in the
year to end-March, the slowest growth in three years, as costly
credit and the rising price of fuel in Asia's third-largest
economy smothered demand.
(Additional reporting by Henry Foy in MUMBAI; Editing by Matt