- Title: JAPAN: Honda cuts forecasts and hopes for China recovery
- Date: 29th October 2012
- Summary: TOKYO, JAPAN (OCTOBER 29, 2012) (REUTERS) EXTERIOR OF HONDA HEADQUARTERS BUILDING HONDA OFFICIALS TAKING SEATS FOR NEWS CONFERENCE HONDA LOGO CONFERENCE IN PROGRESS (SOUNDBITE) (Japanese) HONDA MOTOR'S SENIOR MANAGING OFFICER FUMIHIKO IKE SAYING: "We changed our estimates mainly due to the impact from the situation in China, the decrease of unit sales following the changes of business environment in European, South American and Indian markets, and the impact from the currency exchange rates in the developing countries." CONFERENCE IN PROGRESS VARIOUS OF JOURNALISTS TAKING NOTES (SOUNDBITE) (Japanese) HONDA MOTOR'S EXECUTIVE VICE PRESIDENT TETSUO IWAMURA SAYING: "We see the negative influence continuing until the lunar New Year holiday in February, though we expect the production in China is likely to start recovering after that period, which is the premise for our estimates." AUDIENCE SEATED HONDA OFFICIALS SEATED (SOUNDBITE) (Japanese) HONDA MOTOR'S EXECUTIVE VICE PRESIDENT TETSUO IWAMURA SAYING: "As you know, China has become the biggest auto market in the world and it has undoubted growth potentials, so we will stick to our investment plans bidding on the potentials." HONDA OFFICIALS BOWING AND STANDING UP VARIOUS OF PEOPLE LOOKING AT VEHICLES IN HONDA SHOWROOM HONDA LOGO PEOPLE GETTING INTO HONDA CR-Z HYBRID CAR HONDA SIGN HONDA CARS ON DISPLAY MORE OF PEOPLE LOOKING AT HONDA CAR
- Embargoed: 13th November 2012 12:00
- Keywords:
- Location: Japan
- Country: Japan
- Topics: Business,Industry,Transport
- Reuters ID: LVA76ZQB819I8ZCL6PNV2VTXSXSA
- Story Text: Japanese automaker Honda on Monday (October 29) cut its full-year net profit forecast by a fifth after sales in China were hit by a popular backlash against Japanese goods amid territorial rows between Tokyo and Beijing.
"We changed our estimates mainly due to the impact from the situation in China, the decrease of unit sales following the changes of business environment in European, South American and Indian markets, and the impact from the currency exchange rates in the developing countries," Senior Managing Officer Fumihiko Ike said in an announcement in Tokyo.
Honda cuts its forecast of sales in China in 2012 to 620,000 vehicles from its previous forecast of 750,000.
The cut, prompted by a slump in sales amid often violent protests in a dispute about ownership of islands in the East China Sea, makes it likely that bigger Japanese rival Nissan Motor, and possibly Toyota Motor, will follow suit when they report quarterly earnings early next week.
Honda officials warned it could be February before business in the world's biggest auto market returns to normal.
"We see the negative influence will continue until the lunar New Year holiday in February, though we expect the production in China is likely to start recovering after that period, which is the premise for our estimates," Executive Vice President Tetsuo Iwamura said.
Honda said on Monday that its two biggest China plants would continue to run on one shift, rather than two, until at least the middle of next month, with output then gradually picking up ahead of Chinese New Year in February - a traditional buying season.
Honda plans to invest $880 million to expand capacity at its plants in Guangzhou and Wuhan over the next few years.
"As you know, China has become the biggest auto market in the world and it has undoubted growth potentials, so we stick to our investment plans bidding on the potentials," Iwamura said.
Shares in Honda - which fell 15 percent to near 9-month lows amid the China protests - ended 4.7 percent lower at 2,399 yen, their biggest one-day fall in nearly 5 weeks. - Copyright Holder: REUTERS
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