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Honda Forecasts 63% Drop in Profits

Earnings amidst the devastation.

by on Jun.14, 2011

Shortages of the Honda Civic will contribute to the maker's plunge in profits for the fiscal year.

Just days after its rival, Toyota, projected it would see a huge plunge in profits as the result of the March 11 Japanese earthquake, Honda Motor Co. says it also will take a devastating hit to its bottom line, with earnings for the current fiscal year likely to plunge by 63.5%.

Honda – like Toyota – delayed its forecast for the fiscal year running through March 2012 while it assessed the impact of the earthquake and subsequent tsunami, which shut down most of its home market production for a month.

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Honda now expects to have most of its factories back up to speed sooner than initially anticipated, but several key operations, including the plants producing the critical new 2012 Civic, will be operating below capacity until autumn.

Honda anticipates the current fiscal year will see profits of 195 billion yen ($2.4 billion), down by nearly two-thirds from the 534 billion yen recorded during the fiscal year that ended last March 31.


Honda Warns of Shortages of New Civic

Maker also delaying launch of new CR-V.

by on May.02, 2011

The Japanese parts shortage will mean shortages of the new Honda Civic - and a number of other models.

Honda has warned its U.S. dealers that it will be further cutting production due to the ongoing shortage of Japanese-made parts – which will likely result in a shortage of many products including the all-new Civic compact, which is just in the midst of what was supposed to be a high-profile launch.

The shortages will also force Honda to delay by at least a month the planned autumn launch of the updated 2012 CR-V crossover vehicle.

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Honda is not the only maker feeling the pinch, however.  Toyota, in particular, expects significant product shortages in the months ahead, and has delayed several key launches.  Meanwhile, even Detroit makers are preparing for production delays, Chrysler today warning it could see its original 2011 production plans reduced by as much as 100,000 vehicles.

“Our goal remains to normalize overall production sometime around the end of the year,” John Mendel, executive vice president of sales for American Honda, told U.S. dealers in a written memo.