Shares Close Lower in Asia, Electronics and Car Makers Slump
Japanese shares closed lower in reaction to data showing that the country's economy grew less than expected in the first three months of the year. The finance minister made comments indicating he expected the Bank of Japan to extend further lending in an effort to support the limping economy. The country has been depending on exports to drive GDP higher, but so far local consumer spending has remained low.
Today in Japan, electronics companies shed value with Casio Computer diving 5.1% and camera maker Canon falling 2.7%. Clarion, a maker of car audio systems, sank 4% and NEC, a computer and software company, tumbled 3%. Computer game maker Nintendo slid 3.2%. The game maker has seen its sales fall 21% in the past year, according to Techradar.com. Meanwhile Playstation 3 maker Sony fell 1.6%.
Car makers closed lower with Toyota Motor slumping 2.6% after announcing it will make free repairs on 22,300 Passo cars. The tiny subcompact vehicles, which go by the name Sirion in Europe and Australia, have engine stalling problems, a fault that Toyota will fix by tinkering with the computer program that controls the engine and transmission, according to the Wall Street Journal. Other Japanese car makers also fell today: Isuzu tumbled 5%, Mazda slid 3.3%, Honda lost 3%. Suzuki Motor, which makes both cars and motorcycles, dropped 3.8%.
In China, car companies also lost value. DongFeng, which has recalled 84,200 cars for transmission problems, including its compact Quashqai SUV, according to the Global Times. FAW Car fell 1.8% and SAIC lost 1.6%.
Hong Kong car makers followed suit with Denway plunging another 5.3% after yesterday's 24% nosedive -- thanks to a buyout offer from Guangzhou Automobile that fell far below investors' expectations. Warren Buffett-backed BYD Co. retreated 3.7%. The electric car company plans to have a fleet of its taxis running on the streets in Shenzhen by the end of the year -- a testing ground for the company's green technology. Great Wall Motor sank 4.4% and Geely, the new owner of Volvo, tumbled 3.9%. Chinese ingenuity might be able to dream up high-tech cars and manufacture them fast, but so far it doesn't have a solution for raising stock prices in this market.