These Car Makers Are Taking Over China
Toyota (NYSE:TM) managed to please Wall Street while simultaneously indicating that problems persist in the Chinese market. The company posted a 16 percent increase in U.S. October sales compared to last year and boosted its fiscal year profit forecast 2.6 percent. The improved guidance is particularly impressive because the company lowered its expected vehicle sales by 50,000 units, and expects production in China to remain low through the current quarter.
Toyota sales in China dropped by nearly 50 percent in October, but the company may be the least exposed of the Japanese automakers. At the end of October, Honda (NYSE:HMC), which also saw its October sales in the region cut by half, lowered its full-year profit forecast by about 20 percent. Nissan, with an October sales drop of 41 percent in China, is expected to lower forecasts as well when it releases numbers on Tuesday.
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American manufacturers have helped to fill the void in the Chinese car market. Ford (NYSE:F) announced that October sales in China rose 48 percent from a year ago to 60,518 units. Sales in the region are up 14 percent year to date compared to 2011, led by the Ford Focus. Ford has been on a winning streak recently. Solid earnings were highlighted by its new C-Max Hybrid outselling the Toyota Prius v in October.
General Motors (NYSE:GM) announced a new record for sales in China. The company and its joint ventures sold 251,812 units, growing 14.3 percent year over year. Sales are up 10.5 percent for the year to date compared to 2011. Strong October sales in China were widely expected as the situation for Japanese automakers in the region was predictably grim.
GM also announced that it will replace its existing $5 billion credit facility that is due to mature in 2015. The new $11 billion revolving credit facility is broken into two parts, a $5.5 billion three-year facility and a $5.5 billion five-year facility.