Honda quarterly profit up on weak yen, despite some vehicle sales woes; lowers profit forecast

TOKYO – Honda’s net profit for the July-September quarter surged nearly 18 per cent but the Japanese automaker lowered its earnings forecast for the full year Tuesday, pointing to difficulties in China and its home Japan market.

Honda Motor Co. reported a 141.8 billion yen ($1.3 billion) profit for the fiscal second quarter, up from 120 billion yen a year earlier. Sales edged up 4 per cent to 3.015 trillion yen ($27.9 billion), helped by a weak yen, which added 123 billion yen ($1.1 billion) to net sales and other operating revenue.

Like several other automakers, Honda’s usually pristine image for quality is being clouded by a massive recall spanning 12 million vehicles worldwide related to faulty inflators in air bags made by Japanese supplier Takata Corp. Honda was among Takata’s biggest customers.

Tokyo-based Honda lowered its profit forecast for the year ending March 2015 to 565 billion yen ($5.2 billion) from 600 billion yen, citing sales woes in Japan and China.

The maker of the Fit subcompact, Odyssey minivan and Asimo robot had earned 574 billion yen the previous fiscal year.

The dollar had cost about 100 yen the previous fiscal year, but Honda expects it to average about 104 yen this fiscal year. It stood at about 108 yen Tuesday.

A sales tax hike in Japan in April has crimped auto purchases here, although sales were inflated right before the rise.

Honda sold fewer vehicles in North America for the quarter, but its sales in Europe and Asia, outside Japan, improved year-on-year, where new models were popular.

Overall, Honda sold 1.07 million vehicles for the fiscal second quarter, up from 1.05 million the same period a year earlier.

Honda’s motorcycle unit also did well for the quarter, boosting sales in India, Indonesia and Vietnam, while selling fewer units in Japan and North America compared with the previous year.

Honda expects to sell fewer vehicles for the fiscal year, at 4.6 million vehicles, down from the previous forecast for 4.8 million vehicles. But the new projection is still above the 4.3 million vehicles sold the last fiscal year.


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