Honda Motor Company in Japan today announced that vehicle production declined by more than 50% for the month of May 2011. It was the third straight month that production dropped due to the ongoing negative effects of the Japan earthquake and tsunami in March.
Speaking to reporters in Tokyo, Fumihiko Ike the chief financial officer of Honda reaffirmed a projected 65% decrease in profit to ~¥195 billion for the current fiscal year through March, the result of production disruptions caused by the earthquake, rebuilding costs, as well as a strong Yen at an unprecedented ¥80:$1. Some analysts are questioning the forecast thinking that it is too low and that Honda will have a stronger recovery with May the likely low point.
Earlier this month Japan’s largest automaker, Toyota, said profits would decline by 31% in the fiscal year.
In Japan, May Honda production resulted in a year-on-year decrease for the sixth consecutive month going back to December 2010.
(Jan. – May 2011)
|Outside of Japan||103,106||-49.4%||911,352||-16.7%|
In North America production dropped to 60,000 vehicles, a decline of -45% in May. Year-to-date Honda’s North American production at 450,000 is showing a -19% decline, in what was once its most profitable market. Compounding the financial difficulties Honda faces, exports from Japan including the profitable Acura line of luxury vehicles, dropped to 6,300 vehicles, -59%, or 56,000 vehicles, -18% year to date. )
|Honda Exports from Japan|
(Jan. – May 2011)
(See also Honda Motor Predicts $2.4 Billion Profit Drop from Earthquake and Toyota Predicts 31% Profit Dip in Fiscal Year from Earthquake and Japanese U.S. May Sales Plunge as Inventories Evaporate. Toyota, Nissan and Honda Decline in Earthquake Aftershocks and General Motors May Sales Flat in U.S. as Retail Sales Rise 9% and Ford May Sales Flat in U.S. as Retail Sales Rise 5% and Korean Automakers Post Huge U.S. Sales Gains as Disputed Free Trade Agreement Heads for Congressional Approval)