* FY2012/13 operating profit seen growing by 2.7 times
* Honda sees bigger U.S. car market, raises own forecast
* Honda to focus on beefing up small-car line-up – exec
* Sees neutral impact from forex this year
* Mazda falls into red, hit by strong yen
By Chang-Ran Kim
TOKYO, April 27 (Reuters) – Honda Motor Co forecast
a near-tripling of operating profit in the year ahead on surging
Asian sales and a recovery in the United States, marking an
emphatic rebound from a 2011 hammered by the yen’s record
strength and natural disasters.
Japan’s No.3 automaker is expected to ride
faster-than-expected growth in demand in the United States, its
biggest and most profitable market, where sales of the
remodelled CR-V crossover have jumped by more than a quarter so
far this year.
For the year to next March, Honda forecast an operating
profit of 620 billion yen ($7.7 billion), up from 231.36 billion
yen in the financial year just ended. The forecast was slightly
behind analysts’ consensus for 645 billion yen, but bullish
nonetheless for a company noted for its conservative earnings
guidance.
“It’s a pretty positive forecast, but they were the worst
hit automaker by the tsunami and the Thai floods, so they should
be returning or have returned to normal production,” said Fujio
Ando, senior managing director at Chibagin Asset Management.
Executive Vice President Tetsuo Iwamura told a news
conference Honda now expects the overall U.S. market to grow to
14.3 million vehicles this year, up from a forecast of 13.5
million made at the end of last year, and Honda aimed to recover
a market share of more than 10 percent as soon possible.
“The North American market is slowly recovering, while we’re
entering new segments in Asia,” he said. “We’re expecting to
grow faster than the overall market.”
Honda, which has lagged a recovery from the effects of
disasters in Japan and Thailand by rivals Toyota Motor Corp
and Nissan Motor Co, more than doubled its
fiscal fourth-quarter operating profit, ending five straight
quarters of year-on-year decline.
January-March operating profit jumped to 111.98 billion yen
($1.4 billion), but slightly lagged an average estimate of 123.2
billion yen in a survey of 23 analysts by Thomson Reuters
I/B/E/S. Net profit, which includes earnings made in China, rose
60.7 percent to 71.59 billion yen.
Honda set its dollar rate assumption for the business year
at 80 yen and the euro at 105 yen, predicting neutral impact on
profits from currencies this year.
Honda was the last Japanese car maker to get its supply
chain in order after a massive earthquake and tsunami in March
2011, and only re-started work at its Thai car plant at the end
of last month following October’s floods.
ROBUST SALES FORECASTS
Giving robust sales guidance, Honda forecast its global car
sales would jump 38.4 percent to 4.3 million vehicles and its
motorcycle sales would increase 10.2 percent to 16.6 million in
2012/13.
It sees sales in North America rising 31.5 percent to 1.74
million vehicles, sales in Japan climbing 20.7 percent to
710,000 and the rest of Asia by 56.5 percent to 1.31 million.
Honda will make minor changes later this year to the
year-old Civic after the latest version of the perennially
popular model was panned by critics, raising deeper concerns
over whether the automaker was slipping in a battlefield made
tougher by products from Hyundai Motor Co and
resurgent U.S. rivals Ford Motor Co and General Motors Co
.
“The biggest challenge we see in the year ahead is the
intensifying competition in all markets,” said E xecutive Vice
President Iwamura. He added that Honda would pour its energy
into beefing up its products in the small-car segments to
compete better in emerging markets.
Honda CEO Takanobu Ito has conceded that the company he took
over in mid-2009 may have let down its guard during the previous
decade of rapid expansion, while pulling back on vehicle
development too much after the global financial crisis.
Its shares have risen 5.6 percent in the past three months,
lagging gains of around 14 percent by both Toyota and Nissan.
Honda is under intense scrutiny to redeem itself with U.S.
consumers t his fall with the next version of the Accord, which
will be the first major model to carry a new generation of
engines and transmissions that it hopes will make its future
cars the most fuel-efficient in their categories.
Also on Friday, Mazda Motor Corp reported a 38.72
billion yen operating loss for the year ended in March, against
a profit of 23.84 billion yen in 2010/11. Japan’s fifth-largest
automaker is heavily exposed to the strong yen, exporting 77
percent of its domestic output.
Toyota will report on May 9 and Nissan on May 11 .
