It's not a secret that the auto sales cycle may be turning stormy. Still, that doesn’t mean it is time to batten down the hatches. For those with a little faith in the future, Nissan Motor looks like a bargain. The U.S. auto sales appear to have downshifted for now. This spells tough times for Japan’s auto makers, which count the U.S. among their biggest markets.
Toyota Motor Corporation is also feeling more profit-sapping pain from the strong yen. This is due to the fact that a large portion of the vehicles it sells in the U.S. are imports from Japan. Honda and Nissan are now much better positioned. According to CLSA’s Christopher Richter, Nissan’s level of local production means its North American business doesn’t have substantial yen exposure. Nissan's product mix is shifting toward SUVs and light trucks, with strong sales for its Rogue crossover SUV constrained only by supply issues. A refreshed Titan pickup and the launch of a new Armada SUV should help, too, in the low-gas-price environment.
Like most auto makers’ shares, Nissan’s have been weighed down this year by concerns that sales in the U.S. can’t get much better. And it does have substantial production in the U.K. that is exported to Europe, and could face tariffs after Brexit is negotiated.
