Honda posts Q1 net loss but forecasts full-year profit

TOKYO (AFP) – Japanese carmaker Honda yesterday reported a net loss for the first-quarter and forecast a much-reduced full-year profit as the coronavirus pandemic hits sales and production.

For the April-June quarter, the firm posted a JPY80.87 billion net loss, against a JPY172.30 billion profit in the same period last year.

Sales plunged 46.9 per cent on-year to JPY2.12 trillion, forcing the automaker to record operating losses of JPY113.69 billion.

Like other car firms, Honda “was forced to suspend production and sales activities in many countries throughout the first quarter”, Vice President Seiji Kuraishi said in an online news conference.

“In the four-wheel business, we suspended production in 12 out of 17 countries as of the end of April, but now we’ve resumed operation in all production bases,” he said.

File photo shows people walking past a Honda car on display at Honda Motor Co headquarters in Tokyo. PHOTO: AP

“We will swiftly move towards getting our products into the market from the second quarter,” he said.

For the full-year to March 2021, Honda said it would record a net profit of JPY165 billion, down 63.8 per cent from the previous year, on sales of JPY12.8 trillion, which would be down 14.3 per cent.

In the United States (US), even though it suffered declining sales in the first quarter, it is recovering “at a pace faster than” the US automobile market as a whole, Kuraishi said.

Looking ahead, however, Honda said it anticipates slower sales in the US and Japan, he said.

In China, where the auto market as a whole is rebounding thanks to government stimulus measures, the automaker aims to sell more vehicles than last year, he said.

The announcement comes a week after rival Nissan warned of a massive USD6.4 billion net loss for the current fiscal year as it reels from the pandemic.

Last week, US auto giant General Motors also reported a loss hit by the pandemic but at a smaller-than-expected scale thanks to strong pricing for some newer auto models.