Honda’s quarterly profit report is encouraging, but shows that Japan is its toughest market, with sales declining for twelve straight months.
Honda Motor reported a net income rise of 6,9 percent to 127,8 billion yen (1,06 billion dollars) for the third quarter, maintaining its full-year profit forecast at 525 billion yen. Its operating profit is 164,8 billion yen, compared with analyst estimates of 176,6 billion yen. In homeland Japan, delivers are still declining for twelve straight months, after an increase of a sales-tax by the government. Operating profit went down to 26,2 billion yen in the quarter, from 63 billion in 2014. However, the slow pace in Japan it is in antithesis with the sales in China, where the demand has been helped by the crossover line-up and also with US market in which has registered the best two months of sales in 15 years.
“Honda has been the most aggressive Japanese carmaker to produce locally in markets overseas, so it’s not benefiting a lot from a weaker yen this year”, said Seiji Sugiura, an analyst at Tokai Tokyo Research Center. “In the meantime, it’s suffering from a slump in the domestic market”. Honda expects the sales in the US to hit 1,6 million cars this year and the deliveries for all markets to exceed 17 million vehicles in the twelve-month period through March 2017. Sales in Honda’s largest market, the US, rose by 2,2 percent in the last ten months, encouraged also by demand for its SUV models. In China, the Japanese automaker has been declared the fastest-rising major auto brand this year in the country, with a 33 percent boost this year through October.