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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.


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.