KQV AM 1410

Oct 28, 3:47 AM EDT

Honda profit rises on weak yen, lowers forecast


AP Photo
AP Photo/Koji Sasahara
Business Video

Document
Governors' letter seeking federal help for auto industry (PDF)
Multimedia
Toyota recall
50 Years of Honda in the U.S.
Look at Detroit automakers
The Cars That Made Chrysler Famous
Latest News
Ford recalls 205,000 SUVs for fuel tank leaks

Canada loses bid to make Ford engines to Mexico

Ford profit falls in third quarter on truck costs

Latest News
Q&A: Why Japan's economy needs more juice

Honda profit rises on weak yen, lowers forecast

Buy AP Photo Reprints

TOKYO (AP) -- Honda's net profit for the July-September quarter surged nearly 18 percent but the Japanese automaker lowered its earnings forecast for the full year Tuesday, pointing to difficulties in China and its home Japan market.

Honda Motor Co. reported a 141.8 billion yen ($1.3 billion) profit for the fiscal second quarter, up from 120 billion yen a year earlier. Sales edged up 4 percent to 3.015 trillion yen ($27.9 billion), helped by a weak yen, which added 123 billion yen ($1.1 billion) to net sales and other operating revenue.

Like several other automakers, Honda's usually pristine image for quality is being clouded by a massive recall spanning 12 million vehicles worldwide related to faulty inflators in air bags made by Japanese supplier Takata Corp. Honda was among Takata's biggest customers.

Tokyo-based Honda lowered its profit forecast for the year ending March 2015 to 565 billion yen ($5.2 billion) from 600 billion yen, citing sales woes in Japan and China.

The maker of the Fit subcompact, Odyssey minivan and Asimo robot had earned 574 billion yen the previous fiscal year.

The dollar had cost about 100 yen the previous fiscal year, but Honda expects it to average about 104 yen this fiscal year. It stood at about 108 yen Tuesday.

A sales tax hike in Japan in April has crimped auto purchases here, although sales were inflated right before the rise.

Honda sold fewer vehicles in North America for the quarter, but its sales in Europe and Asia, outside Japan, improved year-on-year, where new models were popular.

Overall, Honda sold 1.07 million vehicles for the fiscal second quarter, up from 1.05 million the same period a year earlier.

Honda's motorcycle unit also did well for the quarter, boosting sales in India, Indonesia and Vietnam, while selling fewer units in Japan and North America compared with the previous year.

Honda expects to sell fewer vehicles for the fiscal year, at 4.6 million vehicles, down from the previous forecast for 4.8 million vehicles. But the new projection is still above the 4.3 million vehicles sold the last fiscal year.

---

Follow Yuri Kageyama on Twitter at https://twitter.com/yurikageyama

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy and Terms of Use.