Auto sales fall 14 percent
US auto sales fell 14 percent to about 14.4 million units on an annualized and seasonally adjusted basis last month, marking the worst result for the industry since August 1998, as weak consumer confidence and rising gas prices hit the industry’s most profitable vehicles hardest. General Motors Corp, Ford Motor Co and Chrysler LLC posted deeper sales declines than expected, led by a sharp drop in trucks and SUVs. GM sales fell 23 percent, Ford 19 percent and Chrysler nearly 30 percent, the automakers said on Thursday. Asian competitors also struggled, with Toyota Motor Corp posting a 5 percent decline and Nissan Motor Co sales dropping almost 2 percent.
Subprime crisis hits Japan
Japanese financial institutions together lost more than ¥1.5 trillion (US$14.4 billion) in the year to March because of the US subprime mortgage crisis, a report said yesterday. The nation’s eight major banking groups alone are likely to post a combined subprime-related loss of more than ¥900 billion, the Nikkei Shimbun said. That is around ¥200 billion more than forecasts made public so far, it said. “While this is less than the losses incurred by their European and US counterparts, it has still dealt a major blow to Japanese banks’ profit forecasts,” the Nikkei said. One of those eight, Mizuho Financial Group Inc, will post subprime losses likely to top ¥565 billion, highlighting how banks widely involved in such investments are set to pay the price, the paper said.
Murchison denies talks
Australian iron ore miner Murchison Metals denied it was in takeover talks with Sinosteel (中國中鋼) on Thursday amid market rumors it was the next resources firm on the Chinese state-owned giant’s shopping list. Murchison revealed last Tuesday that Sinosteel had acquired 2.4 percent of its shares, the same day rival miner Midwest accepted a A$1.36 billion (US$1.27 billion) takeover bid from China’s second largest steel firm. News of Sinosteel’s stake caused a 21 percent spike in Murchison’s share price, fuelling speculation that the Chinese could be lining up a new takeover target. But Murchison, responding to a query from the Australian Securities Exchange, said it had not been contacted by Sinosteel.
Canon to build US plant
Japanese electronics giant Canon said yesterday it will spend more than US$600 million to expand its US operations, building a new factory in Virginia and creating about 1,000 new jobs. Canon will make the plant a regional hub for production of toner cartridges, reducing transportation costs, the company said. The move will also enable the group to reduce its carbon dioxide emissions, Canon president Tsuneji Uchida said in a statement. Construction of the new plant will start this September with operations expected to begin next December.
Sony may miss target
Japan’s Sony Corp is likely to miss its annual profit target due to a stronger yen and weak financial markets, but still post a surge in earnings on brisk sales of electronic goods, a report said yesterday. For the financial year ended in March, the company will report an operating profit of around ¥380 billion (US$3.63 billion), up 430 percent from a year ago, the Nikkei Shimbun said without citing sources. The figure is about ¥30 billion less than Sony’s forecast issued in January.