TOKYO - A weaker yen against the dollar means Japanese carmakers book fewer profits in yen on every car they sell abroad.
The ability of Japan's auto companies to cope with the yen's slide determined their profits in the fiscal first half ended Sept. 30, a period when the yen eased to about 117 to the dollar from about 138 a year earlier.
Strong sales of Subaru cars at home and abroad helped Fuji Heavy Industries Ltd. post record first-half profits. Mazda Motor Corp., which determinedly has been cutting costs for several years as part of its turnaround efforts, intensified its cost cutting as soon as the yen showed signs of softening, and emerged largely unscathed.
The weak yen hit Honda Motor Co. hard, however. Isuzu Motors Ltd. also was hurt by the dollar-yen rate, although the collapse of the Japanese and Asian truck markets dealt it a more severe blow.
Here are earnings summaries for Japanese carmakers that have announced results for the six months to Sept. 30.
Group net income fell 13.8 percent to 136.4 billion yen or $1.275 billion at prevailing exchange rates. Group revenue slid 3.2 percent to $28.4 billion.
It was the first time in four years that first-half revenue and earnings declined.
Unit sales of cars rose, on gains in North America, Japan, and Europe.
At the parent-company level, the yen's slide erased $692 million from Honda's profits.
Mazda's group net swung to a profit of $123.4 million from a net loss of $41.1 million a year earlier, even as unit sales and revenue eased.
The year-earlier figure was restated in line with new accounting rules on consolidating subsidiaries. The rules went into effect this past term.
The yen's slide erased $350 million in profit from the parent company. But Mazda's management, which has been in a turnaround mode for several years, jumped on the problem as soon as the yen began to show signs of weakness and managed to offset some of the currency losses with cost cutting and other measures, said CFO Gary Hexter.
The first-half gains came almost entirely in Japan. Indeed, efforts to improve the finances of Mazda's domestic subsidiaries, including 60 dealership concerns controlled by Mazda, are showing dramatic results.
Rising sales of Subaru cars at home and abroad pushed Fuji Heavy's net profit at the parent company up 8.7 percent to a first-half record $89.8 million. Revenue rose 7.5 percent to a first-half record $4.193 billion.
The yen cut $135.6 million from operating-level profits, but that was almost entirely offset by higher volumes. Cost cutting, meanwhile, pushed profits higher.
The first-half net loss of Isuzu's parent widened to $251.6 million from a loss of $21.8 million a year earlier, as revenue fell 19.3 percent to $3.53 billion.
Unit sales dropped to 125,947, down 20 percent compared with the dismal level of 1998, which had been the worst year for truck sales in Japan in 30 years. Lower sales trimmed $256.2 million from Isuzu's recurring profits, while the yen's weakness erased an additional $114.3 million. Cost cutting offset some, but not enough.
Isuzu, owned 49 percent by General Motors, predicted its full-year net loss at $233.8 million, compared with the prior year's loss of $42.7 million.