Toyota Motor Corporation (ADR) (TM), Honda Motor Co Ltd (HMC) & General Motors Company (GM): Will the Falling Yen Save Japanese Automakers?

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As mentioned earlier, Ford Motor Company (NYSE:F) has been having a very strong year. Its growth in China is nigh-on spectacular, and I don’t have to tell you that it is doing well here. For example, it sold about 71,000 F-Series trucks in May alone at about $10,000 in profit each. Furthermore, it is currently making significant investments in China and Europe, and so its current profit is not as high as it could be. In a few years, those investments will pay off, and it should be able to rake in the cash. Furthermore, for all it’s in the news, it is still relatively inexpensive with a P/E of only 10.67.

General Motors Company (NYSE:GM) is a shakier bet than Ford. It sold less vehicles in the most recent quarter than it had the year before. However, one of the reasons Ford Motor Company (NYSE:F) has been doing well is that it has released a number of updated vehicles recently, and so it has some of the best vehicles on the market. However, General Motors Company (NYSE:GM) had not done so because of the lingering effects of the bankruptcy. It will soon introduce several updated models, including a new Silverado. This strategy is starting to pay off for Ford, and there’s no reason that it won’t pay off for General Motors Company (NYSE:GM) as well. Furthermore, General Motors currently has 12.4% market share in China, and so its car sales should see significant secular growth.

To sum things up, Toyota Motor Corporation (ADR) (NYSE:TM) and Honda Motor Co Ltd (NYSE:HMC) will certainly benefit from the devaluation of the yen. However, they won’t benefit as much as it first appears because of their substantial production overseas and substantial Japanese revenues. Furthermore, they’re losing market share in the United States and aren’t positioned extremely well in China. Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) on the other hand are doing, or soon should be doing, well in the United States and are well-positioned in China.

The article Will the Falling Yen Save Japanese Automakers? originally appeared on Fool.com.

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