Unexpectedly, Honda and Nissan have both reported positive operating profits for the fourth quarter. Demand for cars jumped because consumers are shunning public transport amid the pandemic. Unfortunately, the relief this has given Japanese auto groups will not last, not least due to a global shortage of semiconductors.

A closer look at the numbers shows a lasting revival in earnings is not on the cards. In the nine months to December, Nissan posted a net loss of ¥367bn ($3.5bn), on a 29 per cent decline in sales. At Honda, the previously resilient motorcycle division has started running out of gas, with sales slipping in the last quarter.

Shares in the pair have been lifted by the broader rally that has pushed Japan’s Nikkei 225 Index to a three-decade high. Nissan’s stock has doubled from a March low. Its enterprise value to forward ebitda of 46 times is many times higher that of global peers such as Volkswagen.

Yet the outlook is much bleaker for Honda and Nissan than for European rivals. They have lagged behind in the shift to electric vehicles. That means higher costs in coming years as the duo restructure. Honda already faces growing competition from electric scooter makers, including Chinese manufacturer Niu, whose sales rose 43 per cent last year. A global semiconductor shortage has cut Honda’s sales outlook by 100,000 cars in the current quarter.

Nissan faces worrying financial hurdles. Its debt pile of more than ¥8.2tn ($78bn) is growing and has pushed its debt-to-equity ratio above 200 per cent. But the business should ideally spend far more on research and development. Its current budget is half that of Toyota.

The real challenge lies in the coming quarters. Automakers have been keeping production lines going thanks to stockpiles of chips. Prices to source these scarce components will rise, adding pressure to margins. Nissan now runs a negative nine-month operating margin of 2.5 per cent, something it avoided even during the worst of its management scandals. Ominously there is not much of a buffer left.