Japan's Honda profits decline on semiconductor crunch

Honda's fiscal first-quarter profit took a dive by 33 per cent from last year due to a global computer chip shortage, a pandemic-related lockdown in China and the rising costs of raw materials that hurt the Japanese automaker.

Tokyo-based Honda Motor Co. reported on Wednesday that its profit totalled 149.2 billion yen (USD 1.1 billion) in the April-June quarter, down from 222.5 billion yen (USD 1.7 billion) a year earlier. Quarterly sales slipped 7 per cent to 3.8 trillion yen (USD 28 billion). Honda kept its profit forecast for the full fiscal year through March 2023 unchanged at 710 billion yen (USD 5.3 billion).

Honda, which makes the Accord sedan, Odyssey minivan, and Civic compact, sold about 815,000 vehicles last quarter, down from 998,000 vehicles in the same period a year earlier. Auto sales dropped in almost all regions around the world, including Japan, the US, and Europe.

"I ask for the understanding from all those who are still waiting for their vehicles and vow that our whole company is doing its utmost to make the deliveries even a day sooner," Chief Financial Officer Kohei Takeuchi said. Takeuchi said the semiconductor shortage curtailed motorcycle production as well as car production, adding to uncertainty about future prospects.

Nissan Motor Co. saw its quarterly profit plunge to less than half of what it was a year earlier. Both were hit by the chips shortage. That includes a collaboration with General Motors Co. in North America to develop models going on sale in 2024. To beef up its capital base and keep a flexible capital strategy, Honda said it was buying back its own company common shares of up to 100 billion yen ( USD 740 million), starting on Friday through March 2023.

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