Honda pessimistic on profits, optimistic on car production
TOKYO » Honda’s profit for the fiscal year through March 2012 is expected to plunge 63.5 percent as vehicle sales slipped amid a parts shortage caused by the quake and tsunami in northeastern Japan.
Honda Motor Co. gave the forecast Tuesday, more than a month later than usual. Like other Japanese automakers, the maker of the Odyssey minivan and the Fit compact needed more time to assess the aftermath of the March 11 disaster.
But Honda said vehicle production in Japan is expected to be back at nearly normal levels by later this month, and production in regions outside of Japan is expected to be back up to pre-disaster levels in August or September.
Honda said it will try to make up for lost time and deliver more vehicles, but it is expecting its global vehicle sales for the fiscal year through March 2012 to drop 6 percent on year to 3.3 million vehicles. Honda had sold 3.51 million vehicles worldwide the previous fiscal year.
Given the devastation from the March 11 magnitude-9.0 earthquake and the tsunami that it unleashed, analysts say the recovery at Japanese automakers has been remarkable.
Still, all the automakers are suffering, and the damage has continued because key auto parts suppliers were in the northeastern region.
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Koji Endo, auto analyst with Advanced Research Japan Co. in Tokyo, said the disaster had hit Honda harder than Japanese rivals, such as Toyota Motor Corp. and Nissan Motor Co., partly because it was such a lean company, it didn’t have much inventory when the disaster-related parts shortages came.
"Honda was deeply hurt, and its strength of having little inventory is going to make its recovery take longer," he said, noting that Honda’s auto business was likely in the red for the fiscal year and the results were being made up by its motorcycle division.
"This is going to take a while."
Honda is projecting a profit of 195 billion yen ($2.4 billion) for the current fiscal year, down sharply from $6.6 billion recorded the previous fiscal year.