China makes Honda lower its full-year net profit forecast by a fifth

Article by Christian Andrei, on October 30, 2012

Due to the backlash against Japanese products in China, Honda Motor Co. lowered its full-year net profit forecast by a fifth. Honda expects that it may be February before the market in China normalizes. This reduction in the market is the result of protests over a territorial dispute in the East China Sea.

It’s highly possible that other Japanese automakers, Nissan Motor and Toyota Motor, would also cut their predictions when they post their quarterly earnings early next week.

Fujio Ando, managing director at Chibagin Asset Management, said that Toyota and Nissan would probably reduce their forecasts too. He explained that this is because the current issues in China weren’t considered as factors in the forecasts.

In September, the demand in China for Honda, Toyota and Nissan cars declined as the dispute worsened, with South Korea's Hyundai Motor and Germany's BMW increasing their market shares. Toyota said that its sales in China fell by 49% in September. Last month, sales by Honda and its China joint ventures decreased by 40.5%.

China made up 17% of Honda’s 2011 sales, its No. 2 market after the U.S. On Monday, Honda announced that its two largest plants in China would continue to operate on one shift instead of two, until at least mid-November.

Output is expected to go up ahead of Chinese New Year in February - a traditional buying season. It lowered its full-year China sales prediction by 17% to 620,000 vehicles, but said that there won’t be any change to the investment in the country. Honda is planning to invest $880 million to increase its capacity at its plants located in Guangzhou and Wuhan in the next several years.

Topics: honda, china, profit

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

Remember Zenos Cars, a British carmaker that specializes in designing and building lightweight and high-performance sports cars? If you are wondering how the company is faring with their E10 lightweight...
by - January 21, 2017
Mercedes-Benz has revealed that in 2017, its series 124 coupé will be celebrating its 30th anniversary. While this itself is a significant event, it will also mean that this model...
by - January 21, 2017
BMW’s 550i xDrive has long been considered as one of the most successful business sedans in the world. For the brand, this may not be enough as it has officially...
by - January 20, 2017
Amazon is now moving beyond the four corners of online retailing. Only recently, the retail giant has been awarded a patent for its Road Network system. Since the patented technology...
by - January 20, 2017
The newest version of the Lamborghini Huracan is not a Superleggera, but a Performante. When Lamborghini filed for a patent for a new name, there were still debates whether this...
by - January 20, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries