Japanese auto companies look set to be a major beneficiary from the Detroit strike with their U.S. competitors likely to get bogged down in labor negotiations that hurt sales.
Many Japanese carmakers receive a large percentage of their overall revenue from U.S. markets, so the labor action there may give a tailwind to firms such as Toyota, Honda and Nissan. The strike seems to be getting broad support from the U.S. public, even after the Big Three rejected demands for raises of as much as 40% over four years.
"Japanese auto firms are in a good place to benefit” from any protracted strikes in the United States that cause supply disruptions, said Oliver Lee, a portfolio manager at Eastspring Investments Singapore. "Taking into account stronger pricing and the current cost outlook, Japanese auto manufacturers continue to look attractive to us.”