Morgan Stanley: 'Premature To Turn Bearish' On Japan's Automakers

Japanese automakers are poised to boost manufacturing capacity and make improvements to their products' appeal, an analyst said Wednesday.

November U.S. sales for the group grew 7.8 percent from a year earlier to 481,397 vehicles, compared with 8.7 percent growth in total U.S. auto sales for all manufacturers to 1.3 million.

Morgan Stanley's Ryosuke Hoshino said with consumer financing standards for automobile purchasing in the U.S. "loose," he expects continued sales gains in December for Japanese automakers.

The group's U.S. market share year-to-date is running at 37.6 percent, up from 37.1 percent in the same period last year, Hoshino said.

Citing upcoming capacity expansion and product revisions, Hoshino said it's "premature to turn bearish" on the group.

November "incentives" or promotional pricing offered to U.S. consumers, grew an average of 8.4 percent industry wide to $2,893 per vehicle, while Japanese manufacturers' incentives in the U.S. grew by 7.9 percent.

Hoshino said the trend "needs watching," and singled out Honda for special concern, noting it "matched industry levels" in the recent growth rate of its pricing incentives.

Among those posting U.S. November sales, Fuji Heavy Industries Ltd.'s FUJHY Subaru sales grew at the fastest pace, up 28 percent to 45,273 vehicles, while Nissan sales barely budged, with 103,188 units sold.

Nissan's U.S. market share fell to 7.9 percent in November, from 8.6 percent a year earlier, while Subaru's share rose to 3.5 percent, from 2.9 percent last year.

Toyota remained the U.S. leader among Japanese auto makers in November, with a 14 percent share of the total U.S. market, nearly unchanged from a year ago. Toyota's sales of 183,346 vehicles grew 7 percent last month.

Honda followed, with a 9.4 percent U.S. market share, also unchanged, while its November sales grew 8.7 percent to 121,814 vehicles.

Mazda Motor Corp. MZDAF market share was nearly unchanged at 1.6 percent as its sales grew 6 percent to 21,242 vehicles.