Life & Style | Motoring

Honda surprises with a record $1.68b profit

Honda Motor reported record profit for a fiscal first quarter as sales growth in new markets offset the damage from a stronger yen and soaring material costs.

  • AP
  • Published: 23:41 July 25, 2008
  • Gulf News

Tokyo: Honda Motor reported record profit for a fiscal first quarter on Friday as sales growth in new markets offset the damage from a stronger yen and soaring material costs.

Honda, Japan's No 2 automaker, earned a better-than-expected 179.6 billion yen ($1.68 billion) in the April-June quarter, up 8.1 per cent from the same period the previous year.

Analysts surveyed by Thomson Financial had forecast 131.3 billion yen ($1.2 billion) in quarterly profit.

Sales for the quarter dipped 2.2 per cent from a year ago to 2.867 trillion yen ($26.79 billion), largely because the rising yen eroded the value of overseas earnings. If the yen's value had held at levels of a year ago, sales would have jumped about 7 per cent, Honda said.

Riding on its reputation for making cars with good mileage, the Tokyo-based manufacturer of the Civic and Accord compacts has racked up solid results despite worries among the world's automakers about a US slowdown and rising steel prices.

Strong performance

Honda sold more vehicles worldwide than in any other fiscal first quarter at 962,000 vehicles, up 1.7 per cent on year.

Cost-cutting, the decrease of auto discounts in North America and a lift from equity-related income from Chinese affiliates added to a strong performance, according to Honda.

Demand for Honda products is booming in Asia, Brazil and other new markets, making up for declines in vehicle sales in the US, Europe and Japan, it said.

Honda was the only automaker to record better US sales in June compared with a year ago, while others saw sales plummet in the worst June for the industry in 17 years.

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