Japan forklift sales unseasonally weak, exports still struggling

by SR on April 25, 2012

Not much good news in March 2012 forklift data

Japan forklift sales and exports monthly to March 2012

  • Why it matters. On 24 April 2012 the Japan Industrial Vehicle Association (JIVA) disclosed forklift sales and exports for Japan for the month of March 2012. Nearly all goods are transported at some point by forklift trucks, so weak or strong forklift sales reflect purchasers’ views on the level of activity over the next 3-6 months. Japan’s forklift manufacturers dominate the global market and thus in aggregate their sales should be a fair indicator of global demand.
  • Domestic sales up year-on-year but seasonally soft. Forklift lead times seem to be fairly short – I estimate 2-4 weeks for general purpose models sold locally – so previous-year figures were affected by the Tohoku earthquake of 10 March 2011. Accordingly it is not surprising to see domestic sales in March 2012 rising by 42.1% YoY to 7213 units due to a low-base effect. On the other hand, the month-on-month increase of 32% was below the long-term median for March, so there was a little softness evident.
  • Forklift sales for export continue to struggle. Forklift exports fell by 6.2% YoY to 4175 units in March 2012 despite an unchallenging comparison. Exports did rise by 5.2% month-on-month but given that the median month-on-month increase for March is 12.2% over the past decade, this was distinctly uninspiring. As the chart above shows, domestic sales have been recovering steadily – probably due to robust increases in auto production and rebuilding efforts in Northern Japan – while exports languish.
  • But we do have year-on-year growth… Caveats and concerns aside, the simple fact that the market is expanding is undeniably more positive than a flat or negative year. As the “running total” chart below illustrates, cumulative forklift sales and exports for 2012 (the red line) have now reached 29,098 units, which is 12.7% higher than the first 3 months of 2011. Unless we have a significant slowdown, I would expect forklift sales to grow by 10-15% for the whole of calendar 2012. However, we are still a long way below the happy days of 2008 (the green line) when forklift sales soared to a record 164,000 units for the year.Japan cumulative forklift sales and exports year-to-date
  • In theory, Toyota Industries, but I prefer Denso. I have explained at length why I think Toyota group auto parts companies will enjoy a very favourable environment in 2012 – Toyota is coming back strong with new models, production is soaring and the year-on-year comparisons could scarcely be easier. In addition, earthquake-related costs incurred in the March 2012 financial year will drop out of the P&L in the March 2013 term. Toyota Industries is the world’s largest supplier of compressors for automotive air conditioners, so it benefits from this trend as well as from rising forklift sales. Still, even though I have a liking for Toyota Industries as a company and even with forklifts growing, I would prefer a “purer” auto parts play such as Denso to capture resurgent auto production. Related stocks: Toyota Industries; Komatsu; Hitachi Construction Machinery; Nippon Yusoki (Nichiyu).Japan forklift sales and exports

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