Honda raises forecasts on solid motorbike sales
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Japan’s Honda Motor said Tuesday it was raising annual forecasts after first-half profits rose over 19 percent on motorcycles sales in Asia. Japan’s third largest automaker now expects net profit to reach 675 billion yen ($6 billion) for the fiscal year ending March, down from last year but a still an increase from its forecast last quarter.
It also revised up annual sales to to 15.8 trillion yen.
The company said it was seeing strong growth in the sales of motorbikes in Indonesia, Vietnam and other Asian countries, and touted cost-cutting efforts.
It said net profit in the April-September period was up 19.3 percent to 455.1 billion yen while operating profit jumped 21.7 percent to 513.9 billion yen.
Sales rose 5.0 percent to 7.87 trillion yen.
“Honda enjoyed strong sales of motorcycles… This offset the negative impact of floods in Mexico on its production,” Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm said ahead of the results.
Honda was forced to temporarily halt operations at its largest auto factory in Mexico due to floods in June, and said at the time that it would lose 50 billion yen as a result.
Japanese automakers remain on edge over talk of U.S. tariffs, though immediate action by Washington has been put off for now.
“Japanese carmakers are also bracing for the impact of U.S. trade disputes with other major economies,” Takada said.
Questions & Answers
Q.What is the primary reason for Honda raising its annual forecasts?
What is the primary reason for Honda raising its annual forecasts?
Honda attributed the raised forecasts to strong growth in motorbike sales across Asian countries, particularly Indonesia and Vietnam. The company also mentioned its cost-cutting efforts contributed positively to the financial outlook.
Q.What is Honda's revised net profit forecast for the current fiscal year?
What is Honda's revised net profit forecast for the current fiscal year?
Honda now anticipates its net profit to reach 675 billion yen for the fiscal year ending in March. This represents an increase from its forecast last quarter, although it is still lower than the previous year's figure.
Q.How did the floods in Mexico affect Honda's financial performance?
How did the floods in Mexico affect Honda's financial performance?
While strong motorbike sales offset the negative impact, Honda had to temporarily halt operations at its largest auto factory in Mexico due to floods in June. This was expected to result in a 50 billion yen loss for the company.
Q.Are there any external factors currently concerning Japanese automakers like Honda?
Are there any external factors currently concerning Japanese automakers like Honda?
Japanese automakers remain vigilant regarding potential U.S. Tariffs, though immediate action from Washington has been delayed. They are also preparing for the broader impact of U.S. Trade disputes with other major global economies.
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