Honda lifts forecasts despite ninth-month profit drop

The company said that auto sales in Japan grew 4.4 per cent but US sales slipped 2.6 per cent

Japanese automaker Honda has revised forecasts for its full-year net profit. AP 

Japanese automaker Honda said on Friday it was revising up forecasts for its full-year net profit despite logging a fall of 34.5 per cent for the nine months to December.

The country's third-largest auto manufacturer revised up its full year net profit to 695 billion yen ($6.3bn) from the previous forecast of 675bn yen, while also lifting annual sales to 15.85 trillion yen from 15.80tn yen.

For April-December, net profit fell to 623.3bn yen "mainly due to the impacts of the enactment of the US tax cuts and Jobs Act in the same period last year", Honda said.

Operating profit fell 3.2 per cent mainly because of decreased sales revenue, as well as increased sales and administrative costs and "negative foreign currency effects", it added.

The company said auto sales in Japan grew 4.4 per cent but US sales slipped 2.6 per cent to 1.242 million units. Sales in China, where the economy is suffering a growth slowdown, also fell.

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But motorcycle sales climbed 6.6 per cent in emerging Asian markets including India, Vietnam, Thailand and Indonesia, it said.

“Honda has been enjoying strong sales of motorcycles especially in Southeast Asia," Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm, told AFP.

"Motorcycles are Honda's advantage, which its rivals do not have," he said.

But he added that "Japanese carmakers are bracing for the impact of the US-China trade dispute, which has already been visible on raw material costs."