Honda Motor Co. saw its net profit for the quarter ended December 2013 more than doubled to JPY160.7 billion ($1.56 billion), thanks to strong sales of the Fit subcompact that was rolled out in Japan in September. Honda, however, trimmed its vehicle and motorcycle sales forecasts by 1 percent for the fiscal year ending March 2014, no thanks to declining demand in Thailand that offset what has otherwise been a golden year for Japanese corporate earnings that have benefited from the weaker yen.
The carmaker now expects to sell 4.385 million vehicles and 17.32 million motorcycles in the current fiscal year ending March 31. Honda said it is targeting to sell a record 4.5 million vehicles or more in the 2014 financial year.
Honda remarked that its sales plunge in Thailand is likely to continue due to the political turmoil in the country. "Every Japanese carmaker was hurt in Thailand, and so was Honda," said Kota Yuzawa, an analyst at Goldman Sachs Group. "Honda hasn't launched its new hit products in the region so we'll have to wait until next year to see a pickup in volumes."
Honda’s quarterly net income was below than expectations of analysts, but its operating profit (JPY228.6 billion) was higher than the JPY220.4 billion average analyst estimate compiled by Bloomberg. For the year ending in March 2014, Honda still expects to post JPY580 billion in net profit. Honda chief executive Takanobu Ito is targeting to sell 6 million vehicles annually by end-March 2017, compared with 4.01 million units sold in the year ended March 2013.
Honda logged JPY131.1 billion in operating profit last quarter in North America, up from JPY70.89 billion a year earlier. Honda unveiled a revamped Fit at the 2014 Detroit auto show that will be rolled out in North America this year. Honda is counting on the model to capture market share from the Chevrolet Sonic and Ford Fiesta.