Honda Motor Co. racked up an 80.8 billion yen ($765 million) fiscal first quarter loss, a reversal from a 172 billion yen profit in the previous fiscal year. Executive Vice President Seiji Kuraishi told reporters sales and profits were expected to rebound.
“Of course, uncertainties remain about the coronavirus, but much of the negative impact was caused by the difficulties in production and sales that came from a lockdown,” he said. The crisis has reaffirmed the need for Honda to reshape its operations by beefing up online sales and growing leaner, he said.
Tokyo-based Honda’s quarterly sales dropped 47% to 2.1 trillion yen ($20 billion), according to the manufacturer of the Accord sedan, Clarity fuel cell, Asimo robot and Odyssey minivan. Automakers have been hit hard by the pandemic. Detroit-based General Motors Co. company lost $806 million from April through June, as it closed its plants for two months.
Nissan Motor Co., already reeling from a scandal surrounding its former executive Carlos Ghosn, racked up a 285.6 billion yen ($2.7 billion) loss and has announced plant closures in Spain and Indonesia.
Toyota Motor Corp. reports results on Thursday. Honda said it is projecting a 165 billion yen ($1.6 billion) profit for the fiscal year through March 2021, down 64% from a year earlier. But the company acknowledged the situation remains uncertain, as outbreaks of the virus intensify in some regions, including Indonesia and Japan.
Honda managed to maintain an operating profit in the last quarter for its motorcycle division, an important part of its business. That wasn’t enough to offset overall losses for the quarter, the company said.
It expects to sell 4.5 million vehicles in the current fiscal year, down from 4.79 million vehicles in the fiscal year that ended in March. Honda officials said China remained an important market for the automaker. Recent data show the Chinese auto market is already starting to recover. That's good news for Japanese automakers, including Honda.
Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama