Japanese automaker Honda Motor Co yesterday reported that it sank into the red for the April-to-June quarter, as its sales plunged over the COVID-19 pandemic, especially in the US, Japan and India.
Honda racked up an ¥80.8 billion (US$765 million) loss, compared with a profit of ¥172 billion a year earlier.
Executive vice president Seiji Kuraishi told reporters that sales and profits were expected to rebound.
Photo: AP
“Of course, uncertainties remain about the coronavirus, but much of the negative impact was caused by the difficulties in production and sales that came from a lockdown,” he said.
The pandemic has also made the company reaffirm the need to reshape its operations, such as beefing up online sales and growing leaner, Kuraishi added.
Tokyo-based Honda’s quarterly sales dropped 47 percent to ¥2.1 trillion, the manufacturer of the Accord sedan, Clarity fuel cell, Asimo robot and Odyssey minivan said.
Honda said the future remained uncertain, citing the pandemic growing in places such as India and Indonesia, and how economic downturns might affect consumer spending.
The company said it is projecting a ¥165 billion profit for the fiscal year that ends in March next year.
Honda was able to maintain an operating profit in its motorcycle division, an important part of its business, but that was not enough to prevent its sinking overall losses for the quarter, the company said.
It expects to sell 4.5 million vehicles for the current fiscal year, down from 4.79 million vehicles the fiscal year that ended in March.
Honda officials said that China remained an important market for the automaker.
Recent data show that the Chinese auto market is already starting to recover. That is good news for Japanese automakers, including Honda.
Separately, German automaker BMW AG lost 212 million euros (US$250 million) in the second quarter as the pandemic shutdowns cut vehicle sales by one-quarter in the April-to-June period.
BMW chief executive Oliver Zipse yesterday said that he was “cautiously optimistic” about the second half of the year, predicting the automaker would still make some profit selling vehicles.
“Our swift responsiveness and consistent management strategy enabled us to limit the impact of the corona pandemic” during the first half of the year, he said.
The company saw a rebound in China, its biggest market and hit earlier by the virus.
Sales fell 25 percent to 485,500 vehicles under the BMW, Mini and Rolls-Royce brands.
Revenue fell 10 percent to 43.2 billion euros.
The company retained its financial forecast for the full year, saying that its worldwide auto deliveries would be “significantly lower” than last year’s, and that its operating margin in its automobile business would be between zero and 3 percent.
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