* Sees 11% rise in material, labour, logistics costs this
* Sees FY22 profit down 7% vs market estimate of 6% rise
* Sees vehicle retail sales up 3% to 4.2 mln units in FY22
TOKYO, May 13 (Reuters) - Japan's Honda Motor on
Friday forecast a 7% fall in annual earnings, instead of an
expected rise, and warned that the long chip crunch and rising
raw material costs were hurting profit, echoing comments from
rivals Toyota and Nissan.
Global automakers such as Honda have slashed production due
a severe shortage of semiconductors, and now face what top
automaker Toyota Motor called an "unprecedented"
increase in costs as China's COVID-19 curbs have shuttered
factories and the war in Ukraine further strains supply chains.
"We are currently hoping to get the business on a recovery
track in June," by using parts that are in stock, Senior
Managing Executive Officer Yasuhide Mizuno told a post-earnings
Mizuno said the company was hearing the lockdown situation
in Shanghai was getting better and supply chain and logistics in
the country were recovering up to about 80%.
Honda, Japan's second biggest automaker by sales, forecast
operating profit will fall to 810 billion yen ($6.29 billion)
for the current fiscal year that began in April. Analysts
expected a 6.3% rise to 926.3 billion, according to Refinitiv.
It expects to sell 4.2 million vehicles globally this year,
a 3.1% increase from last year.
Toyota on Wednesday forecast a 20% slump in profit this
year, while Nissan Motor said it expected profit to be
"Adding to uncertainty on supply and production, further
increase in cost is expected," in the fiscal year ending March
2023, the company said in a statement. It said the impacts from
the chip shortage and resurgence of COVID-19 were expected to
The company said it expects about 300 billion yen in costs
to cover rising material, labour, and logistics expenses this
year, a roughly 11% jump from last year.
Maker of the best-selling Accord, Honda said on Thursday it
would slash production by about a fifth at two of its domestic
factories for the rest of May, a month after it cut back
production by about a half at one of them.
The company on Friday reported a smaller-than-expected 6%
fall in operating profit to 199.5 billion yen for the quarter
ended March 31, beating an average estimate of 152.2 billion
yen, Refinitiv Eikon data showed.
Honda's shares - which closed up 2.2% on Friday amid a 2.6%
rise in the broader market - have risen 1% so far this
($1 = 128.8300 yen)
(Reporting by Satoshi Sugiyama; editing by Jason Neely and