Honda, Japan’s third-biggest carmaker announced it seeks to sell a record 4.5 million vehicles or more in 2014, but as profit missed analyst estimates, it also warned of slowing demand in emerging markets.
For some of its key emerging markets like Indonesia and India, where auto demand has been falling across the industry, Honda thinks new and smaller models could allow it to maintain strong sales growth.
The Tokyo-based company also said in a statement today that its net income went up to 160.7 billion yen ($1.6 billion) in the three months ended Dec. 31, but although the numbers doubled – it failed to beat analysts estimates.
With a slump in Thailand, where Honda deliveries plunged last quarter and will probably continue to do so because of the political turmoil there; the company decided to cut the sales forecasts for automobiles and motorcycles for this fiscal year.
“Every Japanese carmaker was hurt in Thailand, and so was Honda,” said Kota Yuzawa, an analyst at Goldman Sachs Group Inc. in Tokyo. “Honda hasn’t launched its new hit products in the region so we’ll have to wait until next year to see a pickup in volumes.”
Key to Honda’s aggressive expansion targets, the rising interest rates and currency worries have cast a shadow over the economic growth outlook in several emerging markets, especially in Sutheast Asia and the company now wants the emerging markets to make up for half of the 6 million cars it plans to sell in the year to March 2017, up 50 % from the 2012/13 financial year.