Nissan Leaving, Which Japanese Car Brands Remain?

▲Nissan stated that the steering system defect is due to a broken steering shaft, and the battery issue can lead to failure to start.

[Asia Economy Reporter Kiho Sung] As Korea Nissan officially announces its withdrawal from the Korean market, attention is turning to the remaining Japanese car brands, Toyota and Honda. Existing Japanese car brands have also struggled to recover from the sales slump triggered by last year's Japanese boycott movement, and Nissan's withdrawal is expected to heighten the sense of crisis among the remaining Japanese car brands.

According to the automotive industry on the 31st, Korea Nissan has decided to stop domestic sales of the Nissan and Infiniti brands by December this year. However, vehicle quality assurance, parts management, and after-sales service (A/S) for existing customers will be provided until 2028.

Nissan's withdrawal from the Korean market was already anticipated. Due to the Japanese car boycott movement that began last year, foreign media have repeatedly raised rumors of withdrawal from the Korean market.

The withdrawal of Nissan is also expected to increase the sense of crisis among the remaining Japanese car brands. The cumulative sales volume of five Japanese car brands from January to April this year was a total of 5,636 units. This is a 62.7% decrease compared to the same period last year (15,121 units). Considering that the overall imported car market sales increased by 10.3% during the same period, there appears to be no sign of recovery.

Toyota and Honda have stated that the withdrawal rumors are groundless. Unlike Nissan, they have secured capacity through steady profits. Korea Toyota Motor recorded operating profits of 68.3 billion KRW in the 2018 fiscal year (April 2018 to March 2019), 60.8 billion KRW in 2017, and 45.2 billion KRW in 2016. Honda Korea has maintained operating profits of 19.6 billion KRW, 5.1 billion KRW, and 26.2 billion KRW in the last three fiscal years, respectively. In contrast, Korea Nissan recorded operating losses of 14.1 billion KRW, 800 million KRW, and 22.6 billion KRW during the same period.

Additionally, Toyota has been steadily releasing new cars this year, including the sports car Supra (January), the mid-size sedan Camry Sports Edition (February), and the hybrid car Prius C (March). In March this year, it expanded and relocated its Gwangju showroom and opened an additional service center. Honda is showing strength in the motorcycle sector, which accounts for more than half of the domestic market.

An automotive industry official said, "Nissan's withdrawal will certainly affect the image of Japanese car brands," adding, "However, in the case of Toyota and Honda, they have built up strength through continuous operating profits, so they are expected to create a momentum for a turnaround."