Brexit Hits Japanese Auto Makers invested in Britian

Many Japanese auto makers, such as Nissan, Toyota (NYSE: TM) and Honda (NYSE: HMC) etc., impacted heavily from Britain’s vote to leave the European Union, following by the impactions of Asian market against to the Brexit.

Nissan Motor Co. may suffer most compares with other Japanese auto makers, even though Nissan has been spoken about its desire for UK stays in EU. Nissan’s share fell 2.5% in Tokyo trading on Monday, after a decline of more than 10% Friday, when news of the British referendum result landed in the middle of Tokyo trading hours. Nissan has invested £3.7 billion ($4.9 billion) in the U.K., and has a plant in the northeastern city of Sunderland that produced nearly 500,000 vehicles in 2015.

Toyota Motor Corp. shares fell 1.7% Monday after a nearly 9% decline Friday, whose

total investment in Britain is more than £2.2 billion. Nissan, Toyota and Honda Motor Co. produce about half of all vehicles made in the U.K. each year, during which most of the UK’s auto outputs are exported to other European countries.

There are 1,380 Japanese companies operated in UK and around 50 are auto-related companies, according to the Daisuke Iijima, an official at market-research firm Teikoku Databank. The “Brexit” scenario raised many concerns among those Japanese companies in UK, especially in terms to higher tariffs in the business with other EU nations. Some Japanese companies headquartered in UK may leave to other EU countries.

Reflecting the potential Brexit impact, Nomura Securities’ analyst Masataka Kunugimoto downgraded his estimate for the combined operating profit of the seven major Japanese auto makers for the year ending March 2018. He now expects further decrease in operating profit from an earlier estimate of ¥5.07 trillion to ¥4.15 trillion ($41 billion).

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