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Honda lowers profit forecast amid China-Japan dispute | |
(about 2 hours later) | |
Honda has cut is annual profit forecast after anti-Japan protests in China hurt its sales in the country, its second-largest market. | Honda has cut is annual profit forecast after anti-Japan protests in China hurt its sales in the country, its second-largest market. |
The protests, triggered by a row over disputed islands, saw Chinese consumers shun Japanese products. Honda's sales in China dipped by 40% in September. | The protests, triggered by a row over disputed islands, saw Chinese consumers shun Japanese products. Honda's sales in China dipped by 40% in September. |
The carmaker has forecast a net profit of 375bn yen ($4.7bn; £2.9bn) for the financial year ending 31 March 2013. | The carmaker has forecast a net profit of 375bn yen ($4.7bn; £2.9bn) for the financial year ending 31 March 2013. |
That is down from its earlier projection of 470bn yen. | That is down from its earlier projection of 470bn yen. |
Honda's shares fell 4.7% to 2,399 yen on the the Tokyo Stock Exchange. The firm said it expected income at its China unit to decline further in wake of the dispute between the two countries. | |
Analysts said other Japanese carmakers, which also saw their sales in China hurt by the protests, may also lower their profit estimates. | |
"It's likely Toyota and Nissan are going to cut forecasts in the same way," said Fujio Ando, managing director at Chibagin Asset Management. | "It's likely Toyota and Nissan are going to cut forecasts in the same way," said Fujio Ando, managing director at Chibagin Asset Management. |
"A cut was to be expected because the problems with China weren't factored into forecasts." | "A cut was to be expected because the problems with China weren't factored into forecasts." |
The protests in China followed Japan's purchase of islands known as Senkaku in Japan and Diaoyu in China, over which China claims sovereignty and which are also claimed by Taiwan. | The protests in China followed Japan's purchase of islands known as Senkaku in Japan and Diaoyu in China, over which China claims sovereignty and which are also claimed by Taiwan. |
Recovery from disasters | Recovery from disasters |
Meanwhile, the carmaker continues to recover from last year's natural disasters in Japan and Thailand. | Meanwhile, the carmaker continues to recover from last year's natural disasters in Japan and Thailand. |
It reported a net profit 82.2bn yen in the three months to the end of September. | It reported a net profit 82.2bn yen in the three months to the end of September. |
That is a 36% jump from the same period last year. | That is a 36% jump from the same period last year. |
The firm said the recovery was driven primarily by increased car sales in the US and Japan, as well as the success of its new models. | The firm said the recovery was driven primarily by increased car sales in the US and Japan, as well as the success of its new models. |
However, it warned that its performance n the coming months might be affected by a slowdown in sales in Europe. | However, it warned that its performance n the coming months might be affected by a slowdown in sales in Europe. |
Several countries in the region have been hit by the debt crisis, which has led to a fall in consumer confidence and demand. | Several countries in the region have been hit by the debt crisis, which has led to a fall in consumer confidence and demand. |