Honda dropped its sale target for the year to March 2013 from 4.3 million vehicles to 4.12 million vehicles.
The automaker made the change after sales decreased dramatically due to the anti-Japan riots from China last month. Honda announced it will still keep unchanged the assumed average exchange rate of 80 yen to the dollar for the year to March 2013, but it sees the euro averaging 103 yen and not 105 yen as expected.
Honda said that production cuts in China will continue until the end of November and that production will likely start to recover beginning with December, due to increased demand ahead of the Chinese holiday season in February. The sales target for 2012 has been reduced from 750,000 vehicles to 620,000 vehicles.
“China is a major risk, and this is causing confidence to wane,” Mitsushige Akino, who oversees about $626 million in assets at Ichiyoshi Investment Management Co. in Tokyo. “Risks will persist as long as the company fails to calculate the financial toll.”
Honda has also reduced its operating profit with 16% to 520 billion yen and its revenue projection with 4.9% to 9.8 trillion yen.