TOKYO — Honda Motor Co. tumbled to a $1 billion working loss within the newest quarter amid slumping gross sales because the COVID-19 pandemic broadsided its key U.S. market.
The Japanese automaker swung to an working lack of 113.6 billion yen ($1.06 billion) within the fiscal first quarter ended June 30, reversing an working revenue of 252.Four billion yen ($2.35 billion) the 12 months earlier than.
Honda additionally booked an 80.eight billion yen ($752.Four million) web loss within the three-month interval. It had a web revenue of 172.three billion yen ($1.60 billion) the 12 months earlier than.
In asserting the leads to its Aug. 5 earnings report, the Japanese automaker mentioned income plunged 47 % to 2.12 trillion yen ($19.74 billion) within the April-June quarter, as worldwide gross sales slumped 40 % to 792,000 autos within the interval, led by declines in North America.
Citing the continued influence of the pandemic, Govt Vice President Seiji Kuraishi mentioned working revenue was forecast to fall 68 % to 200 billion yen ($1.86 billion) within the present fiscal 12 months ending March 31, 2021. Internet revenue is seen taking a 64 % dive.
World quantity is forecast to say no 6.1 % to 4.5 million autos for the fiscal 12 months.
Honda’s dismal outcomes come as the worldwide auto business reels from the influence of the pandemic and the ensuing falloff in demand and rules ordering manufacturing unit closures.
Japanese rivals Nissan Motor Co., Mitsubishi Motors Corp. and Mazda Motor Corp., which have already reported earnings, warned of losses within the present fiscal 12 months ending March 31, 2021.
Honda, which manufactures bikes along with vehicles, suspended manufacturing in 12 of 17 nations the place it has operations due to the pandemic, Kuraishi mentioned. These crops are again on-line, however demand is recovering slowly.
“The state of affairs will not get that a lot worse, however it is going to nonetheless take a while to get better to what we have seen up to now,” Kuraishi mentioned.
Honda mentioned the pandemic took a 440.zero billion yen ($4.09 billion) chew out of the underside line. With out that hit or the influence of a sizeable international trade fee loss, Honda would have booked a revenue improve within the fiscal first quarter, in contrast with a 12 months earlier.
Honda expects the pandemic to dent earnings by a complete of 665.zero billion yen ($6.19 billion) for the complete fiscal 12 months. Money is getting tighter, however Honda mentioned it sees no liquidity crunch.
North America, Honda’s second-biggest market after Asia, booked a regional working lack of 77.eight billion yen ($724.5 million) within the interval.
North American gross sales plunged 68 % to 159,000 autos within the quarter. Honda expects North American gross sales to complete the fiscal 12 months 16 % decrease, dropping to 1.54 million autos.
European gross sales fell 53 % to 16,000 models within the quarter, whilst regional working revenue improved to 4.eight billion yen ($44.7 million), from 2.6 billion yen ($24.2 million) a 12 months earlier. European gross sales are seen falling 21 % to 105,000 models for the complete fiscal 12 months.