Honda Executive VP Tetsuo Iwamura
Every three months, Honda is first among Japan’s major automakers to report the numbers for the quarter. It sets the tone for the presentations of its peers. Today was the day to go to Aoyama-Itchome in Tokyo, and to hear that business isn’t bad, but not rosy either. Honda is still making plenty of money, but less than expected.
Why?
The effects of the cheaper yen have worn off. The business climate in most parts of the world outside of the U.S.A. is getting chilly. And most of all, the company is feeling the bite of the Takata airbag scandal that is affecting large swaths of the industry. Honda had its share of recalls, but what really slowed things down was a review of all new models in the pipeline. Cars late to market, money late (or never) in the bank.
Operating profits was down 4.1 percent. Optimistic analysts expected an increase, which should send the stock downwards when the Tokyo bourse opens tomorrow. New product launches and cost savings made the numbers more palatable by increasing net income by 17.9 percent.
The company expects to sell 4.62 million cars this fiscal, essentially flat from last year. Previously, the company planned for 210,000 more. Along with the trimmed sales forecast, the company reduced estimated net profits for the fiscal by 5.8 percent to 565 billion yen.
Expect similar tunes when the rest of Japan’s major automakers reports. Nissan will do so on November 4, followed by Toyota a day later.
