Japan automaker Honda sinks for quarter as pandemic crashes sales

Topics Honda | Japan

File photo of Honda logo

Japanese automaker Honda reported Wednesday it sank into the red for the April-June quarter, as its sales plunged over the coronavirus pandemic, especially in the U.S., Japan and India.

Honda Motor Co. racked up an 80.8 billion yen (USD 765 million) fiscal first quarter loss, a reversal from the 172 billion yen profit the previous fiscal year.

Executive Vice President Seiji Kuraishi told reporters sales and profits were expected to rebound.

Of course, uncertainties remain about the coronavirus, but much of the negative impact was caused by the difficulties in production and sales that came from a lockdown, he said.

The coronavirus has also made the company reaffirm the need to reshape its operations, such as beefing up online sales and growing leaner, Kuraishi added.

Tokyo-based Honda's quarterly sales dropped 47 per cent to 2.1 trillion yen (USD 20 billion), according to the manufacturer of the Accord sedan, Clarity fuel cell, Asimo robot and Odyssey minivan.

How automakers are holding up has varied. Detroit-based General Motors Co. company lost USD 806 million from April through June, as it closed its plants for two months due to the coronavirus.

Japanese rival Nissan Motor Co., already reeling from a scandal surrounding its former executive Carlos Ghosn, racked up a 285.6 billion yen (USD 2.7 billion) loss and announced plant closures in Spain and Indonesia. Toyota Motor Corp. reports results Thursday.

Honda acknowledged the future remained uncertain, citing the pandemic growing in places like India and Indonesia and how economic downturns may affect consumer spending.

Honda said it is projecting a 165 billion yen (USD 1.6 billion) profit for the fiscal year through March 2021.

Honda was able to maintain an operating profit in its motorcycle division for the latest quarter, an important part of its business. That wasn't enough to prevents its sinking overall losses for the quarter, the company said.

It expects to sell 4.5 million vehicles for the current fiscal year, down from 4.79 million vehicles the fiscal year that ended in March.

Honda officials said China remained an important market for the automaker. Recent data show the Chinese auto market is already starting to recover. That's good news for Japanese automakers, including Honda.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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