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Honda Boosts Quarterly Earnings Despite Cost of Takata Recalls

Honda ends ties with Takata in wake of airbag scandal.

by on Nov.04, 2015

Honda showed off its new fuel-cell vehicles, the Clarity, at the Tokyo Motor Show last week.

Honda quarterly earnings rose 7%, to 127.7 billion yen, or $1 billion, from a year earlier despite the hefty cost of repairing vehicles using potentially deadly Takata aibags.

The third-largest of the Japanese makers released results for the July-September period, the second in its fiscal year, a day after it announced it would no longer work with Takata, long one of its most important suppliers under the so-called keiretsu system.

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“We have become aware of evidence that suggests that Takata misrepresented and manipulated test data for certain air bag inflators,” Honda explained on Tuesday. “Honda expects its suppliers to act with integrity at all times, and we are deeply troubled by this apparent behavior by one of our suppliers.”


Honda Profits Tank, Maker Hints at Further Troubles Ahead

Japanese maker withdraws sales guidance for rest of year.

by on Oct.31, 2011

Shortages of the 2012 Honda Civic were a significant drag on the maker's earnings.

Honda saw profits for the second quarter of its fiscal year plunge by 68%, well beyond what analysts had been anticipating – and the maker is hinting the situation may not improve as quickly as it originally anticipated.

Honda had been hoping to begin a much-anticipated turnaround as it finally got its plants back up to speed in the wake of the March 11 Japanese earthquake and tsunami. But the maker is warning it now faces another serious setback as the disastrous floods in Thailand knock a critical plant out of action.

“To put it bluntly, we’re in a really tough spot,” said Honda Chief Financial Officer Fumihiko Ike,” during a briefing on the second quarter results.  “We’re in a much more difficult position because our car factory is inundated.”

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While the maker’s U.S. dealers do no market any vehicles sold in Thailand, that doesn’t mean Honda of America is out of the woods.  The loss of the Thai plant could have a significant global impact, as it produces parts and components used at Honda plants around the world.  Making matters worse, about 10% of Honda’s Tier-One suppliers in Thailand have also been flooded and so have others down the supply chain.