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Home / Business / Honda's earnings forecast falls short on Yen, China CR-V freeze

Honda's earnings forecast falls short on Yen, China CR-V freeze



Honda Motor Co., which was the fastest growing car brand in China until last year, posted full-year earnings guidance, analyst estimates suggesting a stronger yen and a sell-off on the popular CR-V crossover on the biggest one World Vehicle Market

Operating income will have dropped to 700 billion yen (US $ 6.4 billion) in March 2019, up from 833.6 billion yen last year, the company said Friday. The analysts predicted 870.8 billion yen, according to the average of 19 estimates compiled by Bloomberg.

The 7% increase in the local currency against the dollar since the end of 201

6 has made Japanese products less competitive in the overseas markets. The temporary stoppage of CR-V sales is also a setback for Honda, leaving it without its best-selling model in the company's fastest-growing main market for at least three years. The automaker announced the suspension on March 2, saying that it is working on a solution to address an engine problem.

Honda is the first of the three major Japanese automakers to make its annual forecast. Toyota Motor Corp. and Nissan Motor Co. are scheduled to announce their numbers next month.

The Tokyo-based automaker announced a plan to repurchase 1 percent of its shares for 70 billion yen to shore up the stock, which has dropped 2 percent this year. Forecasts for the current year are based on an exchange rate of 105 yen against the dollar, compared with 111 last year.

Electrified Models

Beyond the callback hurdle, Honda is increasing production capacity to meet rising demand in China. The company announced that it would introduce more than 20 electric models to the country this week by 2025, competing with its world rivals for pole position in new cars.


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