Honda raises profit forecast, sticks to Wuhan plant closure schedule
Honda Motor Co raised its forecast for full-year operating profit by 6% on Friday, with a weaker yen increasing the value of its overseas sales.
Japan's third-biggest automaker has been struggling to shore up its automobile operations, with profitability down more than half in the past two years due to a series of quality-related issues.
And like other global automakers, Honda too has been impacted by the coronavirus outbreak on vehicle production in China.
Keep updated, follow The Business Standard's Google news channel
The automaker reiterated on Friday what it had said earlier this week that it would extend the closure period for its three car plants in Wuhan, China, with Dongfeng Motor Group (0489.HK) until Feb. 13, in line with local government directives.
Honda parts supplier F-Tech is moving production of brake pedals from Wuhan to the Philippines temporarily, Nikkei reported last month.
Rival Toyota said on Friday it would extend Chinese factory suspensions until at least Feb 16.
Honda raised its operating income forecast to 730 billion yen ($6.6 billion) for the year to March 31 from a previous estimate of 690 billion yen.
It adjusted its expectation for the yen to average 108 to the dollar for the 12-month period from a prior forecast of 107.
A weaker currency buoys profits because exports become less expensive and the value of overseas earnings increases.
A 730 billion yen operating profit would narrowly top the previous year's result, whereas the prior forecast of 690 billion yen would have been a four-year low.
Honda raised its estimate slightly for global group auto sales in the current fiscal year by 5,000 units to 4,980,000 vehicles.
The company posted operating income of 166.6 billion yen for the October-December period, compared with 170.1 billion yen a year ago and an average forecast of 149.5 billion yen from nine analysts surveyed, according to Refinitiv.
