Honda Projects Profit Despite Supply Chain Damage

Despite the extensive supply chain damage Japanese automakers experienced as a result of last year's earthquake and tsunami in Japan and flooding in Thailand in the autumn, Honda is still projecting a net profit at 470 billion yen on sales of 10.3 trillion yen for the fiscal year to March 2013.

"Strong sales of new models as well as a strong recovery from the supply chain disruption caused by the (natural disasters) contributed to a significant increase in profit in Japan and North America automobile operations," the automaker said in a statement.

It added that a boost in its Asian car and motorcycle business also helped the bottom line despite a still-weak European market.
A high yen also ate into exporters' sales and profits.

Japanese automakers have come under pressure from the value of the currency, which last year hit record highs against the dollar and remains strong, making exports relatively more expensive overseas and cutting the value of repatriated earnings.

In April, Honda said its net profit for the fiscal year to March plunged 60.4 percent to 211.5 billion yen while its full-year sales were down 11.1 percent to 7.95 trillion yen.

Among Japan's biggest carmakers including Toyota and Nissan, Honda was hardest hit and the slowest to recover from last year's natural disasters.

But Honda's results Tuesday were rosier than rival Nissan, which last week said its quarterly profit tumbled 15 percent as strong yen and weak European market dented earnings.

But Nissan, Japan's second-biggest automaker after Toyota, said its full-year forecast was on track.

In its fiscal first-quarter through June, Nissan said its net profit fell to 72.3 billion yen on sales of 2.14 trillion yen, up 2.6 percent.

Smaller Japanese rival Mazda Motor recently reported a quarterly net loss of 6.46 billion yen, shrinking a year-earlier shortfall of 25.54 billion yen.

© Agence France-Presse

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