Business | Automotives

Honda net profit doubles to $3.2b

Strong sales in North America and cost-cutting offset a strong yen

  • AFP
  • Published: 15:41 January 31, 2013
  • Gulf News

  • Image Credit: AFP
  • Japanese automaker Honda's hybrid vehicles are displayed at the company's showroom in Tokyo on January 31, 2013. Honda said that its net profit for the nine months to December 2012 more than doubled to 3.2 billion USD as strong sales in North America and cost-cutting offset a strong yen.

Tokyo: Japanese automaker Honda said on Thursday that its net profit for the nine months to December 2012 more than doubled to $3.2 billion as strong sales in North America and cost-cutting offset a strong yen.

The nation’s third-biggest automaker said the net profit of 291.4 billion yen (Dh11.75 billion) was up from 139.9 billion yen in the same period the previous year, while sales jumped 28.7 percent to 7.13 trillion yen.

However, it trimmed its net profit forecast to 370 billion yen for the year to March, down from a previous 375 billion yen.

This week Japan’s biggest automakers - Toyota, Nissan and Honda - announced record sales for 2012, underscoring their recovery from the 2011 quake-tsunami that hit demand and production, while also highlighting strength in Asian and US markets.

Honda, Japan’s number-three automaker, said it logged sales of 3.81 million vehicles for calendar 2012, up from 3.09 million in 2011.

That helped offset weakness in debt-hit Europe and a downturn in China stemming from a diplomatic row that sparked a consumer boycott of Japanese goods in China, the world’s biggest vehicle market.

In October, Honda blamed the spat with Beijing, as well as a strong yen, for a 20 percent cut to its annual profit forecast.

The long-standing row flared in September when Tokyo nationalised some of a tiny East China Sea archipelago that is also claimed by Beijing, setting off huge demonstrations across China and the boycott.

Japanese factories and businesses across China temporarily closed or scaled back operations over fears of being targeted by angry mobs.

In a bright spot for Japanese manufacturers, the yen has weakened as a new conservative government swept to power with promises to fix the economy and press the central bank for aggressive easing measures.

Analysts say Japanese automakers would likely see a boost in their results as the weaker yen makes their products more competitive overseas and affects the value of income earned overseas.

“The recent yen depreciation is sizeable enough to allow major Japanese carmakers to boost profit,” said Tatsuya Mizuno, auto analyst at Mizuno Credit Advisory in Tokyo.

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