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PARIS — The world's automakers are driving defensively.
Car and truck manufacturers are conserving cash by running down inventories and cutting everything from pay to travel, especially in Japan. German carmakers have gotten help trimming workers' hours through government programs that compensate staff for lost pay.
All have been ruthless about saving money as they endure a recession-led sales slump and hang on until a turnaround finally comes. For now, that seems the best investors can hope for as the companies report very mixed financial results this week.
German automaker Volkswagen AG on Thursday posted an actual profit, like Japan's Honda Motor Co. the day before. But French carmaker Renault SA, and Japan's Mitsubishi Motors Corp. and Mazda Motor Corp., lost millions, even billions of dollars.
Cash-for-clunkers incentives programs have cushioned the blow, helping European carmakers from Renault to Fiat SpA stave off the worst by boosting sales. Meanwhile, Japanese automakers reported a recovery in production after excess inventory was sold.
"Part of their cost-cutting efforts have paid off," said Shotaro Noguchi, auto analyst at Nomura Securities Co. "But it is too early to assume they're back on the recovery track. It is going to take a while before global demand picks up."
Japan's automakers have been hard at work lowering costs by forgoing overtime, slashing bonuses, and decreasing advertising and travel expenses, said Tatsuo Yoshida, auto analyst at UBS Securities Japan in Tokyo.
"The only markets that are growing are China and India," he said. "What we need for a solid recovery is a turnaround in bigger markets like the U.S. and Europe."
Mazda, Japan's fifth biggest automaker, reported a net loss of 21.5 billion yen ($226 million) for the April-June quarter. That followed better-than-expected results at Honda, Japan's No. 2 automaker, and Nissan, the third largest, on Wednesday.
Mazda blamed slumping sales and a stronger yen, which reduces overseas profits.
Mitsubishi kept its forecast for a full year profit after reporting a net loss of 26.4 billion yen ($278 million) for the April-June quarter, a sharp reversal from the net profit of 10.3 billion yen a year earlier.
Government incentives to trade old cars in for newer, less polluting vehicles can't go on forever and Commerzbank analyst Daniel Schwarz wondered how much the market was being distorted by scrapping incentives and how it would look when they run out.
"Are we falling from a cliff or is it rather smooth? Do we go back to economic growth?"
Renault chief operating officer Patrick Pelata pleaded for incentives to continue, saying the crisis "is still here."
Volkswagen reported a net profit of 283 million euros ($399.14 million) in the April-June period — still an 83 percent fall from a year earlier. The Wolfsburg, Germany-based automaker, currently in talks to merge with Porsche SE, said revenue will be lower this year than last because of a drop in demand for new cars, along with rising refinancing costs that "will serve as an additional drag on earnings."
France's Renault reported a net loss of 2.71 billion euros ($3.82 billion) in the first half compared with a net profit of 1.58 billion euros in the same period last year. But CEO Carlos Ghosn said Renault generated positive free cash flow of 848 million euros in the period which demonstrates the auto maker's "resilience."
Max Warburton, senior auto analyst at Bernstein, predicted more state support for the auto industry in Europe.
"We assume this will take the form of help with labor costs and job-cut programs plus financial subsidies, rather than equity investments, but if governments do demand equity issuance, it will clearly dilute current shareholder value," he said in a note.
Fiat CEO Sergio Marchionne, who also runs Chrysler because Fiat became the controlling shareholder in June, told analysts last week that he expects incentive plans to be extended.
On Wednesday, Honda posted a 7.5 billion yen ($79.8 million) profit and raised forecasts for the full year on optimism auto sales will improve. In the U.S., Honda has stayed out of the larger pickup truck and sport utility markets which are risky when the economy is down.
Nissan Motor Co., reported a smaller-than-expected 16.5 billion yen ($175.5 million) loss for April through June. The results reflect tax breaks, cash-for-clunkers and other environment-friendly stimulus measures. Deep cost cuts helped, too.
Also on Wednesday PSA Peugeot Citroen, France's largest automaker, posted a 962 million euros ($1.37 billion) net loss in the first half and Germany's Daimler AG said it lost 1.06 billion euros ($1.51 billion) in the second quarter.
The car and truck companies' performances, while inconsistent, include signs that the global auto sales collapse has hit bottom. But that doesn't mean the industry's troubles have passed, said Moody's Investors Service Senior Vice President Bruce Clark in New York.
Moody's is forecasting light vehicle sales in the U.S., usually the world's largest market, at around 10 million this year, recovering modestly to 11.5 million in 2010. But that's nowhere near the 13.2 million vehicles sold last year or the 16.1 million in 2007.
"The downward slide is probably over and reached a plateau," Clark said. "But there's a big difference between reaching that downside plateau and any kind of a robust recovery."
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AP Business Writers George Frey in Frankfurt, Matt Moore in Berlin, Colleen Barry in Milan, Tom Krisher in Detroit, Helene Goupil in Paris, Mari Yamaguchi, Yuri Kageyama, and Shino Yuasa in Japan contributed to this report.
