Japan automaker Honda reports profit rise despite pandemic
06 Nov 2020 – 15:01
A man walks past cars displayed outside a Honda showroom of company’s headquarters in Tokyo on November 6, 2020. / AFP / Philip FONG
TOKYO: Japanese automaker Honda reported Friday that its profit rose 23% in the last quarter, despite a pandemic that has slammed businesses around the world.
Tokyo-based Honda Motor Co. said its July-September profit was 240.9 billion yen ($2.3 billion), up from 196.5 billion yen a year earlier, as the auto market recovered in some parts of the world.
Honda said it carried out aggressive cost cuts that involved a “fundamental review” of its operations. The situation was also improving from earlier this year, when lockdowns and other problems related to COVID-19 caused disruptions of some production and an inventory crunch.
Quarterly sales slipped to 3.65 trillion yen ($35 billion) from 3.73 trillion yen the same period a year earlier.
Honda, which makes the Accord sedan and Asimo robot, warned that uncertainty remains amid rising COVID-19 cases. But the company stressed it was managing to cling to profitability.
Reflecting that upbeat mood, Honda raised its profit forecast for the fiscal year through March 2021 to 390 billion yen ($3.8 billion) from an earlier projection for 165 billion yen ($1.6 billion).
The latest forecast is still lower than the 455.7 billion yen profit Honda booked in the previous fiscal year.
Honda sold slightly more vehicles in the quarter through September at 1.25 million vehicles, compared to 1.24 million vehicles in the same period of 2019.
But it sold fewer motorcycles at nearly 4.5 million motorcycles, down from nearly 5.1 million.
Kohei Takeuchi, a senior Honda manager, said much of the damage to sales likely came from the pandemic, though he hesitated to blame the entire decline on the pandemic.
Executive Vice President Seiji Kuraishi told reporters Honda is bullish on shifting its lineup to ecological models to keep up with the global efforts to curb carbon emissions and global warming.
Also Friday, Toyota Motor Corp. raised its full year fiscal forecasts to a 1.4 trillion yen ($13.5 billion) profit, after reporting results that appear to show a gradual but sure recovery. Its profit fell 11% in the last quarter.
Nissan Motor Co. reports financial results next week.