JP/KR Autos & Auto Parts: July-September Earnings Review - Winners, risks and what's next

With July-September earnings now complete, we summarize key takeaways and assess the outlook. Easing tariff headwinds and strong HEV demand provided support, while raw material inflation remained a drag. H2 outlooks increasingly hinge on cost reductions, pricing and new-model momentum, alongside shareholder returns, robotics and SDV. Japanese automakers: Jul-Sep results painted a mixed picture. Toyota stood out with a clean beat, while highlighting shareholder returns and robotics as key pillars toward its 20% ROE target. Suzuki's earnings surprise was limited, but we expect raw material headwinds to moderate and the full benefits of price hikes to come through from H2. Underlying earnings improved at both Honda and Subaru, with scope for further upside in H2. In contrast, we see greater risks at Mazda and Nissan, where ambitious H2 recovery targets rely heavily on stronger sales and new-model momentum. Toyota affiliates: Our preference for Toyota Tsusho was reinforced by another stron