Toyota Motor Corp. and Nissan Motor Co. promised shareholders they would do better to recover from the worst industry downturn in a generation, each focusing on different types of cleaner cars to steer their revival.
Japan's No.1 and No.3 carmakers both face a second straight year of losses in the financial year to March 2010, reeling from a sharp sales slide in all major developed markets.
The industry slump, fuelled by tight credit and rising jobless numbers, has already helped drive U.S. rivals General Motors and Chrysler into bankruptcy, and both Japanese automakers said they saw no near-term relief.
"We expect to face continued hardship in our business environment for the near term, despite signs of recovery in some areas," outgoing Toyota President Katsuaki Watanabe told the annual general meeting on Tuesday, adding that the company would try to achieve deeper cost cuts than planned.
"We are sorry to have worried our shareholders," he said.
His counterpart at Nissan, Carlos Ghosn, also expressed regret, and said he saw no convincing recovery yet in the United States, Japan and Europe.
"I feel your disappointment," Mr. Ghosn said, responding to a shareholder who declared he had "never imagined" that Nissan would pay no year-end dividend.
"We really feel very bad about it. But I can say as soon as we see free cash flow significantly positive and the financial crisis behind us ... immediately I can tell you we will pay the dividend," he said.
Asked about management responsibility, Mr. Ghosn, who also heads French partner Renault SA, repeated that he would stay on to see Nissan through the rough patch.
Toyota and Honda Motor Co. , meanwhile, both replaced their chief executives, Mr. Watanabe and Takeo Fukui, with the younger Akio Toyoda and Takanobu Ito, to steer the companies as the race heats up to develop the next generation of cleaner and fuel-efficient vehicles.
Honda's shareholders' meeting, which was not open to the media, yielded no details about its financial results, and at least one shareholder thanked the company for staying in the black unlike its rivals, a spokeswoman said.
Hurt by concerns about the economic recovery and a rise in the yen, shares in the automakers fell between 1 and 5 per cent on Tuesday. Nissan has rallied more than three-quarters this year, while Honda is up a third and Toyota has risen almost a quarter.
Despite the losses looming at Toyota and Nissan, few grumbles were heard from shareholders - one Nissan shareholder only asked to borrow the GT-R sports car, get Mr. Ghosn's autograph and business card and his picture taken with him - with most queries directed at what was in store for next-generation vehicles.
Toyota reiterated its strategy of placing hybrid technology at the core of its efforts, arguing that pure electric vehicles will require a breakthrough in battery performance that it does not see in the foreseeable future.
Toyota has announced plans to sell pure electric cars by 2012, but sees their application as limited due to the short driving range and high battery prices.
Nissan, meanwhile, sought to knock down the hybrid hype.
"We do not put electric cars and hybrids in the same category," Mr. Ghosn told shareholders.
"Hybrids are fuel-efficient technology. EVs are no fuel. Hybrids are an optimisation of combustion engines. EVs have none. Hybrids reduce emissions by 20 to 30 per cent. EVs have none."
Mr. Ghosn stressed that Nissan and Renault were the only carmakers with a mass-volume EV strategy to date, saying he was optimistic that they would proliferate with crude oil at a relatively high $67 a barrel even in a global recession.
Nissan and Renault are due to launch three electric cars each into different model segments by 2012. The first of the Nissan EVs will be unveiled on Aug. 2 at the opening ceremony of its new headquarters in Yokohama, near Tokyo, he said.
Nissan will build more than 100,000 electric vehicles a year when it starts U.S. production of the zero-emission vehicles at its Smyrna, Tennessee plant in two to three years' time. A decision on a European site for battery production and electric car assembly will be made soon, Mr. Ghosn added.
"We have a different strategy from other manufacturers when it comes to electric cars," he told a news conference after the meeting.
"We are the only one working to mass-market EVs and investing for mass marketing - which is a risk, but we think it's a bet in the right direction," he said.