Japan’s No. 2 automaker Honda Motor said yesterday that its profits collapsed in the last quarter as the global economic downturn battered demand for cars in the US and Europe.
Honda said its net profit dived 95.6 percent in the fiscal first quarter through last month from a year earlier to ¥7.56 billion (US$80 million).
Revenue slid 30.2 percent to ¥2 trillion, weighed down by weak sales and a stronger yen.
The group sold 766,000 four-wheel vehicles in the three months to last month, down from 962,000 in the same period of the previous year.
Despite the tough first quarter, Honda upgraded its outlook for the full year to March, forecasting a net profit of ¥55 billion (US$580.6) — down 59.9 percent from the previous year — against an earlier goal of ¥40 billion.
Honda is seeking to accelerate the launch of its hybrid vehicles to ride a wave of interest in fuel-efficient cars, helped by government tax incentives.
Earlier this year the company rolled out a revamped model of its flagship fuel-sipping Insight, which was the best-selling hybrid in April in Japan before being overtaken by rival Toyota’s remodeled Prius.
Japanese car makers have taken a heavy blow from the global economic downturn, which has caused sales to plunge.
Honda was the only one of Japan’s top-three automakers to post a profit for the last financial year to March, outperforming Toyota and Nissan which suffered heavy losses.
Nissan Motor said yesterday that it suffered a net loss of ¥16.5 billion in the fiscal first quarter through June because of a slump in global demand for cars.
Nissan, which is cutting 20,000 jobs to cope with the global economic crisis, reiterated its forecast to end the full business year to March ¥170 billion in the red.
“2009 continues to be a tough year, but we are beginning to see positive results from the measures taken under our recovery plan,” said Nissan chief executive Carlos Ghosn, who also heads the group’s French partner Renault.