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Honda Earnings Rise – But Maker Issues Warning

China poses problems for Japanese maker.

by on Jan.31, 2013

Demand for the new Honda Accord helped boost the maker's global earnings last quarter.

Honda Motor Co. saw a nearly 63% surge in earnings for the October – December quarter, but the maker also issued a warning that earnings could take a tumble in the months ahead because of problems in China, now the world’s largest automotive market.

The Tokyo-based maker earned 77.4 billion yen, or $850 billion during its fiscal third quarter. That was, however, well off the 104.95 billion yen forecast of 11 analysts surveyed by the Nikkei Quick index.

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Quarterly sales rose about 25%, to 2.4 trillion yen, or $26 billion. That increase reflected the maker’s recovery from the production shortages caused the prior year by Japan’s massive earthquake and tsunami. Demand was particularly strong in the North American market. But it also fell short in China as a result of that country’s ongoing dispute with Japan over the ownership of a chain of small, uninhabited islands in the East China Sea.


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.”

In the Know!

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.


Honda Looking For Big Comeback – But Still Facing Challenges

“It’s the worst I’ve seen,” says maker’s top U.S. executive.

by on Oct.28, 2011

This year "has been the worst I've seen," laments Honda's top U.S. executive John Mendel.

As far as John Mendel is concerned New Year’s Eve can’t come soon enough.  The top American executive at Honda says this has been the worst year the Asian automaker has experienced since it first entered the U.S. market – though with its factories now back up to full capacity Mendel believes Honda is finally back on track.

Honda has spent months struggling with shortages of most of its products — notably including the all-new Civic it launched earlier in the year, just before a devastating earthquake and tsunami struck Japan and seriously damaged that nation’s automotive infrastructure.  Production is finally back up to normal, just in time for the upcoming launch of the redesigned 2012 Honda CR-V, long the dominant model in the compact crossover segment.

The Final Word!

This year was “the worst I’ve seen,” said Mendel, during an interview while on the launch of the new CR-V.  “We came out strong,” at the beginning of the year, with demand the strongest it had been since the U.S. economy collapsed in 2008, “and then, boom.”