Japan’s third-largest automaker by revenue has reported its operating profit slid 4.1% to 164.4 billion yen ($1.52 billion) in the July-September period, below average analyst expectations polled by Reuters at a 184.1 billion yen figure.
Honda also decided to slash its delivery prediction for the full year – it said the causes were the increased competition in Japan and China, the impact of mounting recalls and new model launch delays. The company didn’t trim its forecast for revenue as well, citing the weaker yen’s positive impact on the operating profit – previewed at 770 billion yen for the full year.
The negative results are coming after Honda has been implicated in the Takata airbag debacle (the carmaker is the supplier’s largest client) that led to a notice from the NHTSA on a total of almost 8 million vehicles (from various brands, besides Honda). Also, Honda had to issue a public apology after it recalled its new Fit hybrid subcompact no less than five times in Japan – with the top executives accepting a lowered pay as a punitive measure.
The automaker said its sales guidance for the full year stands at 4.62 million vehicles – a 4.3% drop from the previous estimate. Japan and the rest of the Asian region lowered their targets by 100,000 units, while the US level remained intact.