Contents
Investment case: Upgrading Toyota to Buy, downgrading Hyundai Mobis to Neutral 4
We expect Korean automaker margin growth to slow while Japanese margins rise rapidly 10
Shift in 2013 capacity strategy; Japanese automaker capex should turn aggressive 13
Korean makers to accelerate R&D; 54.5 MPG is a serious issue for all makers 16
Localization the best option with current FX movement; Toyota/Korean makers lagging 25
Updated scorecard: Nissan, Hyundai most attractive in mid-term competitiveness analysis 36
Global auto demand forecasts: Outlook not particularly bright, but growth to be positive 40
Toyota Motor (7203.T, Buy): Upgrade to Buy on margin expansion driven by weak yen, new models, and Lexus 48
Hyundai Mobis (012330.KS; Neutral): Defensive premium priced in; down to Neutral 50
Honda Motor (7267.T, Buy): Best choice to capitalize on North American recovery; reiterate Buy 53
Nissan Motor (7201.T, Buy, Conviction List): Remains our top pick in Asia; second on our auto sector scorecard 55
Hyundai Motor (005380.KS; Buy): Substantial catalysts in 2014 57
Kia Motors (000270.KS; Neutral): Slow growth due to capacity restraints and strong KRW 59
Disclosure Appendix 61