Honda chief says fiscal crisis will not impact sales forecast

New Delhi: Honda Motor Co's profit forecast and planned sales numbers will not be substantially affected by the financial market crisis, its chief executive said on Thursday.

"After one month we will make a formal announcement," Takeo Fukui told reporters in India's capital, referring to the auto maker's profit forecast.

"But I don't believe there will be any substantial change."

On sales volumes, he said the company's strong line-up would ensure there was no major impact.

In July, Honda had trimmed its operating profit forecast to 630 billion yen ($5.95 billion, Dh21.84 billion) for the year to March 2009 from 650 billion yen projected earlier to account for extra burden from rising steel and other input costs, but kept its net profit forecast unchanged at 490 billion yen.

Honda, the No. 2 Japan-ese automaker after Toyota, relies heavily on the North American market where it has outperformed a slumping US auto industry this year on the strength of its fuel-efficient cars and its lack of exposure to the collapsing market for full-size pick-up trucks and V8 engines.

Rising demand

Powered by rising demand for small cars like the Fit and Civic, Honda's US sales were up 1.2 per cent through August compared to an 11-per cent drop in industrywide demand.

"There may be some impact in the near future," Fukui said. "But it has two sides. Due to the subprime crisis our bigger cars V6 upward are not selling well. But Civic, we are not able to keep up with demand," he said at a news conference to launch a new version of the City sedan in India.

"Thanks to our strong lineup, we don't see any major impact on our planned sales numbers."

Fukui said crude prices were a bigger issue than the financial crisis, helping boost demand for small fuel-efficient cars.

The Jazz hatchback, called Fit in some markets, is Honda's smallest car. Media reports have speculated Honda's small car to be launched in India next year will be on the Jazz platform.

"I believe there is a requirement of a model slightly even smaller than Jazz," Fukui said, but it was not clear whether he was referring to the car to be launched in India.

He said Honda did not have a small car with diesel engine, but the company understood the importance of small diesel engines.