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Honda Production Declines for 12th Straight Month

Asia and China remain bright spots by setting records.

by on Nov.30, 2009

Honda was first Japanese automaker to assemble motor vehicles in the United States. Starting with a small motorcycle sales office in Los Angeles in 1959, Honda has grown into a multi-line operation throughout the country to include automobiles, power equipment, powersports, engines and jet aircraft.

Honda, the first Japanese maker to make cars in the U.S., is now so integrated that the declining Yen is less of a problem for it than other makers. Still, production in the U.S. is off 32%.

Honda Motor Company reports for the month of October that production in Japan declined for the 12th straight month. In other regions Honda operates in it was the 13th monthly decline, although production in Asia and China set records.

This means the number two Japanese automaker has thus far been unable to shake off the negative effects of the ongoing global Great Recession that began more than a year ago with the collapse of the financial markets.

In relative terms Honda is in much better financial shape than the two ailing Japanese companies flanking it, number one Toyota and number three Nissan, both of which have been posting far higher financial  losses and are vulnerable to the declining value of the Yen.

Total Honda exports from Japan in October 2009 experienced a year-on-year decrease for the 13th consecutive month.

In the all-important U.S. market, the company’s most profitable, Honda saw production decline 15%, a slight improvement from trend. Year to date, though, Honda is off 32% compared to the same period in 2008. In U.S. sales Honda year-to-date is off about 300,000 vehicles, the equivalent output of almost two final assembly plants.

Japan’s second largest automaker predicts net income of ¥155 billion (about $1.7 billion) in the year ending next March, compared with its earlier forecast of ¥55 billion.

Charts follow.

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Honda Fiscal Q2 Income Drops 56%

The Great Recession and stronger Yen hurt financial results.

by on Oct.27, 2009

Honda remains in better financial shape than its Rivals Toyota or Nissan.

Honda Motor remains in relatively better financial shape than its rivals, Toyota or Nissan.

Honda Motor Co., Ltd. announced results for the fiscal second quarter that showed net sales and other operating revenue amounted to ¥2,056.6 billion, a decrease of 27% compared to the same period last year.

The sharp drop was primarily due to decreased sales in its automobile business and the unfavorable impact of currency translation of a weakening U.S. dollar back to Japanese Yen.

As a result, Honda’s consolidated operating income amounted to ¥65.5 billion, a significant decrease of 56.0% when compared to the same period last year.

Nonetheless, Japan’s second largest automaker predicts net income of ¥155 billion (about $1.7 billion) in the year ending next March, compared with its earlier forecast of ¥55 billion.

Second-quarter profit totaled ¥54 billion yen, surpassing some analyst estimates. And clearly puts Honda ahead of number one but loss making Toyota and number three and loss making Nissan in the Japanese industry.

All  will face ongoing challenges if the U.S. dollar continues its collapse.

We have a "yen" for News!

We have a "yen" for News!

Honda raised its full-year forecast for global vehicle sales 3.2% to 3.4 million units in a statement issued this morning.

All the usual suspects were involved in the drastic quarterly decline — decreased profit from lower revenue; the unfavorable currency effects caused by the ongoing appreciation of the Japanese yen; and increased fixed costs per unit because of reduced production. These were only partially offset by decreased selling, administrative expenses, R&D expenses, and other ongoing cost reduction efforts.

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Honda Q1 Net Income Drops 96% as Revenue Dives

Still, the Japanese company ekes out a small profit for the quarter, but the auto business is losing money.

by on Jul.29, 2009

Honda Motor Company, Ltd. net income for the fiscal first quarter ended June 30, 2009 totaled ¥7.5 billion ($79 million), a decrease of 95.6% from the same period in 2008. Net income per common share for the quarter amounted to ¥4.17 ($0.04), a decrease of ¥91.39 from ¥95.56 for the corresponding period last year. (One Honda American Depository Share represents one common share.)

Consolidated net sales and other operating revenue for the quarter amounted to ¥2,002.2 billion (USD 20,854 million), a decrease of 30.2% from the same period in 2008, primarily due to decreased revenue in the automobile business and unfavorable currency translation effects. Honda estimates that if calculated at the same exchange rate as the corresponding period in 2008, revenue for the quarter would have decreased by approximately 20.7%. Critics have long maintained that the Japanese government manipulates the yen to help its export dependent economy.

Honda

Yen (billions)

Q1 ending

June 30 ’08

Q1 ending

June 30, ’09

Difference

(% change)

Net sales and other operating revenue

2,867.2

2,002.2

-865.0

(-30.2)

Operating income

210.4

25.1

-185.3

(-88.0)

Income before Income taxes

224.2

5.4

-218.7

(-97.6)

Equity in income of affiliates

38.1

14.2

-23.9

(-62.7)

Net Income attributable to Honda Motor Co., Ltd.

173.3

7.5

-165.8

(-95.6)

Exchange rate: Honda’s average rates for this fiscal 1st quarter: JPY 97=USD1 / JPY 132=Euro1. Honda’s average rates for the previous fiscal 1st quarter: JPY 105=USD1 / JPY 164=Euro1

Honda’s consolidated operating income for the quarter totaled ¥25.1 billion ($262 million), a decrease of 88%, due primarily to decreased profit attributable to decreased revenue, the increase in fixed costs per unit as a result of reduced production and the unfavorable impact of currency effects caused by the appreciation of the Japanese yen.

Consolidated income before income taxes and equity in income of affiliates for the quarter totaled ¥5.4 billion ($57 million), a decrease of 97.6% from the same period in 2008. Equity in income of affiliates amounted to ¥14.2 billion ($148 million) for the quarter, a decrease of 62.7% from the corresponding period last year.

Sales in all of Honda’s business units for the quarter were negatively affected by the ongoing Great Recession.

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Honda Posts Q4 Net Loss of $2 Billion, but Ekes Out Full Year Return of $1.5 Billion

The Japanese company joins a long list of loss-making auto companies, and predicts next year will be worse.

by on Apr.28, 2009

Honda

Honda is cutting spending on new models, an ominous trend for a company known for its R&D.

Honda Motor Company, the second larger automaker in Japan, reported in Tokyo today a net loss of almost $2 billion, ¥186.1 billion, for its fiscal fourth quarter ending March 31, 2009. The loss was, not surprisingly, attributed to a global decline in demand for its fuel-efficient vehicles.

Honda still managed to show a profit for the full year of  $1.46 billion, ¥137.0 billion, a decrease of 77% compared to the previous a year. Honda is, however, predicting a further decline in results next year to ¥40 billion, a 71% decrease, as the effects of the global Great Recession drag on. Competing Japanese companies, Toyota and Nissan, are expected to post large, full-year losses this year.

Honda sales this year, except for Motorcycles, declined. Motorcycles, at 10.114 million units, rose +8.5%; Automobiles, at 3.517 million units were off -10.4%; and Power Products, 5.187 million units, declined -14.4%.

Next year, Honda predicts that Motorcycle sales will decline to 8.595 million units or -15%; Automobiles will go down to 3.21 million units, -8.7%; Power Products will be off -10.2%, at 4.66 million units. (more…)