TOKYO, Aug 10 (Reuters) - Japan's Honda Motor Co
raised the outlook for its full-year operating profit on
Wednesday thanks to weaker yen, but warned against
over-optimism as it saw the chips shortage continuing and was
concerned about an economic slowdown.
The mixed view from Honda reflected sentiment held widely
among Japanese carmakers that although demand is strong and
recovery from COVID-19 is underway, they have yet to completely
shrug off negative factors hindering operations.
Honda raised its operating profit forecast to 830 billion
yen ($6.15 billion) from 810 billion for the year ending March
Like other automakers, Honda's production for the
first-quarter was hit by the global semiconductor shortage and
China's COVID-19 lockdowns that disrupted supplies of parts.
Still, the impact from the lockdown on production was
already taken into account when Honda said at the start of the
fiscal year that it aimed to sell 4.2 million automobiles,
executive vice president Kohei Takeuchi said.
"The lockdown in Shanghai has been lifted, and in June and
July, we saw an increase in output compared to the same month a
year ago, so the situation has almost normalized," Takeuchi
The chips shortage, though, will continue through this
fiscal year even though there are reports of a surplus of
semiconductors for computers and cell phones, the executive
The Japanese automaker posted a smaller-than-expected 9%
drop in operating profit for the three months ended June 30 at
222.2 billion yen, as a weaker yen helped ease some of the pain
from curtailed production and increased material costs. The
result beat an average estimate of 200.2 billion yen in a poll
of 10 analysts by Refinitiv.
In the United States, Honda's key market, retail sales
halved for the April-June quarter, plagued by low inventories at
dealers despite strong demand.
U.S. dealers only have about 20,000 in inventories, Takeuchi
said, adding that clearing a backlog of deliveries to customers
was its priority, while it was also monitoring the economic
impact of inflation and higher interest rate.
"Even though a considerable number of units have fallen due
to the coronavirus, we have set up a system that enables us to
secure profits in North America," he said. "We are considering
further reduction of fixed costs as a measure if necessary."
Honda's rival Subaru Corp said last week it
expected strong demand from U.S. car buyers to continue while
Suzuki Motor Corp predicted the company would see an
operating profit so long as it delivered enough cars to cover a
backlog of orders.
($1 = 134.9800 yen)
(Reporting by Satoshi Sugiyama; Editing by David Dolan,
Muralikumar Anantharaman & Simon Cameron-Moore)