Honda president Takanobu Ito expects record earnings in five years

Article by Anita Panait, on January 27, 2012

Takanobu Ito, president of Honda Motor Co., forecasts that the company will achieve record earnings in at least five years, driven by sales of Civic compacts and Accord sedans in North America. Ito also forecasts that the company’s operating income in the year ending March 2013 will track back to levels before the September 2008 failure of Lehman Brothers Holdings Inc.  Six months before Lehman’s bankruptcy filing in 2008, Honda posted record annual profits.

"It will be the year of the complete rebound," said Ito, adding that he expects sales to climb above 4 million units for the first time in 2013. Ito said Honda’s recovery will be led by sales in North America as the company prepares to roll out a fully revamped Accord in the fall.

Ito's forecasts are well above analyst estimates compiled by Bloomberg, reflecting the renewed confidence by Japanese carmakers as they recover from the disaster-ridden 2011, with natural tragedies hitting Japan and Thailand. According to estimates compiled by Bloomberg, Honda's operating income will probably double to 586.6 billion yen ($7.6 billion) next fiscal year after dropping 52%.

Honda posted earnings of 953.1 billion yen, 851.9 billion yen and 868.9 billion yen, for fiscal years ended March 2006, 2007 and 2008 respectively. Toyota Motor Corp. said this week that its 2011 sales will be 100,000 units higher than it forecasted in December 2011.

Honda's most popular and celebrated vehicle ever has sped into its ninth iteration and it is clear that the Civic continues to be a benchmark for affordable, entertaining driving with great mileage. The vehicle has kept its tough, sporty ego and remains an incredibly popular choice for men and women alike when choosing a small car.

Launched in 1973, the Honda Civic has reached into the hearts of over 8 million users in the United States, successfully winning them over with its charm, reliability and versatility. Now in its ninth edition, Honda continues to innovate by focusing on a different theme or purpose each time they come to redevelop the Civic. In the latest edition, they decided to focus on the future as they built an individualized compact. This direction led them to consider new areas and still ensure their loyal customers would not be disappointed by the improvements they were implementing.

Honda has freed the Civic from its reliance on previous technologies and has now added a great deal more interaction and options for individual choice. The team has also upped the fuel efficiency and improved performance as well as made it even more comfortable and welcoming inside.

When examining its market, Honda was glad at the depth and at the same time daunted by the variation in the backgrounds and age. Research led the brand to realize that the Honda Civic is loved by students, school teachers, families with young children, professionals, performers, environmentalists, baby boomers, retirees and Generation Y.

They live all over the US from the Snow Belt states to those drenched in sun, the Midwest, Hawaii and even Alaska. But there is one thing which has united all of them and that is their love for the Honda Civic, which offers an unrivalled heart, unparalleled fun and a place in their hearts as an economical and great drive.

Many studies have proven how the market for vehicles has changed over the last ten years and how more than ever people want to drive but they insist on doing so in vehicles which lower emission outputs and with greater fuel efficiency. They have to be affordable too and this plays into the Civic's greatest strengths and the reason why it remains so popular.

The latest lineup comes with a host of variations tailored towards their customers’ needs whether they’re focused on performance or efficiency. This is the future for Honda and it looks rosy.

Topics: honda, earnings

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