Japan’s Honda Motor Co yesterday cut its full-year forecast by more than half, its third revision downwards this year due to a soaring yen and a global economic slowdown.
Japan’s second-largest automaker said it now expected a net profit of ¥185 billion (US$2.08 billion) for the year to March, sharply down from its earlier forecast of a ¥485 billion net profit.
Honda said it planned to cut domestic production by 54,000 cars and would hold off on the release in Japan of the Acura luxury brand, which had been planned for 2010.
“The world market, particularly for four-wheel vehicles, is shrinking rapidly due to the financial crisis, the resultant credit crisis as well as the sudden downturn in the real economy,” Honda said in a statement.
Honda now forecasts sales of ¥10.4 trillion for the year, down from ¥11.6 trillion projected earlier. Operating profit is seen at ¥180 billion, compared with its earlier forecast of ¥550 billion.
The company also said that the yen had stayed high longer than expected.
The Japanese currency yesterday soared to a fresh 13-year high against the US dollar. A strong yen makes Japanese exports less competitive.
Honda earlier this month announced a shock pullout from Formula One, saying it could not stay in the prestigious racing tournament due to the dire state of the global economy.
Meanwhile, Nissan Motor Co said yesterday it was eliminating another 500 jobs in Japan and reducing production as the global economic crisis saps demand for cars.
Japan’s third-largest automaker said it would reduce output by 78,000 cars from January to March by cutting shifts or operating days at plants. The 500 workers are all on temporary contracts. With the cuts, Nissan will no longer have any contract workers at its factories in Japan, a company spokeswoman said.
Nissan said in a statement it took the decision to “manage inventory levels and ensure a balanced production supply in response to continued declines in global vehicle sales.”
Nissan, whose net profit slumped by more than 40 percent in the first half, said in October it was slashing 3,500 jobs worldwide.
In recent months, it had already said it would cut production by 137,000 vehicles, mostly luxury cars and sports utility vehicles that had been meant for export to the US, where demand has plummeted.