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Honda Doubles Earnings

Maker gets big boost from weakened yen.

by on Jan.31, 2014

Strong demand for products like the Honda Civic Coupe combined with a weak yen to double quarterly earnings.

Honda more than doubled its quarterly earnings, much of that gain driven by the weak yen, while also picking up momentum in key markets including North America.

The maker reports it earned 160.7 billion yen, or $1.58 billion for the October-December period – its fiscal third quarter – compared with a 77.4 billion net profit during the same period a year ago.

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Honda has been steadily expanding its global manufacturing operations – it now produces about nine of every ten vehicles sold in North America in the region – but favorable exchange rates nonetheless helped the third-largest Japanese maker deliver such a strong quarter, the weak yen credited with adding $4.2 billion, or 425 billion yen, to its revenues for the quarter.

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Honda Ups U.S. Exports – Increases American Jobs

Maker plans to become net exporter within 2 years.

by on Dec.06, 2012

The 1 millionth American-made Honda bound for export rolls off the Marysville assembly line.

Within two years, Honda will no longer be an “import” automaker. The Japanese-owned company says it expects to become a “net exporter” as it expands shipment of U.S.-made vehicles to South Korea and other parts of the world.

Ironically, at a time when the U.S. is putting a new emphasis on manufacturing – and the well-paying jobs it creates — foreign-owned automakers like Honda are taking a lead in shipping American-made vehicles to a growing list of overseas markets.  Honda is already one of America’s largest automotive exporters, and expects to have shipped 100,000 vehicles to 40 countries by the end of 2012 from assembly plants in Ohio and other parts of the country.

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And, at a ceremony marking the production of the 1 millionth American-made Honda bound for export, company officials said exports will grow larger than the number of vehicles Honda imports into the States by the end of 2014.

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Honda Cuts Shipments of Cars from Japan to U.S.

Maker losing money on models like Fit, CR-Z, Insight.

by on Jun.12, 2012

Honda plans to export the Fit subcompact from China to Canada -- at least temporarily.

Honda is cutting exports of the Japanese-made Fit to U.S. dealers because of lopsided exchange rates.

Crushed by lopsided dollar/yen exchange rates, Honda is cutting back on exports from Japan to the U.S., even though that will curb potential sales and market share growth, the maker’s CEO says.

The maker hopes to offset those reductions by ramping up production in the U.S. and other parts of North America.  Honda recently broke ground in Mexico for a new plant that will supply American dealers with the subcompact Fit and possibly other products.

“Under the current exchange rate of 80 yen per dollar, our export business doesn’t make any profit,” Honda Motor Co. CEO Fumihiko Ike told the trade publication Automotive News. “Definitely, the absolute number of exports to the United States will be decreasing.”

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Honda is by no means the only Japanese maker to curb exports to the U.S. as a result of the weak dollar.  And European makers, including BMW and Audi, have also curtailed exports due to lopsided exchange rates – though with the Euro sliding the gap has narrowed in recent weeks for German and other Continental manufacturers.

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Honda Earnings Down, Longer-Term Forecast Up – For Now

Rising yen causing big troubles.

by on Oct.29, 2010

U.S. sales up but margins down for Honda as the dollar continues to slide against the yen.

Honda is raising its profit forecast for the current fiscal year – even as the rising yen takes a toll on its current performance.

The maker forecasts it will earn 500 billion yen – or $6.2 billion – for the fiscal year ending March 31, 2011, a sharp increase from an earlier forecast of 455 billion yen.  But the upside projection was tempered by news that second-quarter earnings fell 15%, largely as the result of a rising yen that has made it increasingly difficult to market products abroad, especially in key markets like the U.S., without slashing margins.

The project full-year numbers actually disguise the degree of trouble facing the maker, however.  Honda has now earned 408 billion yen for the first half of the fiscal year.  Net income for the final six months, it forecast, should slip to just 92 billion, despite a strong operating performance.

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The upwards pressure on the yen versus and dollar and the yen versus the euro has created what Honda executives describe as an acute market crisis, despite the rise in the company’s operating income, which increased by 149.4% in the second fiscal second quarter, ending Sept. 30.

Honda executive vice president Koichi Kondo said Honda has already been working to procure lower-priced parts from overseas suppliers. “It is natural that the strong yen is accelerating this drive,” Kondo said at Honda’s earnings press conference.

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