Auto Knight

Honda Lowers Forecast

by Darren

Honda has been in the habit of lowering their forecasts lately, and the company has announced they’ll be doing it again. For the fourth time already this year, Honda is predicting lower profits.

Honda, Japan’s second largest auto manufacturer after Toyota, said it now expected a net profit of 80 billion yen for the year ending March 31, rather than the 185 billion yen it had forecast as recently as December. Operating profits are now seen totaling 140 billion yen, rather than 180 billion yen. For the third quarter of the business year — October-December — Honda reported a 90 percent plunge in net profits to 20.2 billion, well below the 32 billion that analysts had expected. Honda shares fell 9.2 percent Friday.

With the economies of most of the world’s economies in the dumper, such results are becoming common place. In particular, worsening conditions in the Japanese auto market have kept sales down.

The current global downturn has hurt sales at all auto makers, even the ones who have traditionally built fuel efficient cars. Since less people are getting approved for credit, less people are buying cars.