Honda reports strong quarterly results in the wake of increased sales of fuel-efficient cars

25 July 2008

While several automakers are looking at declining sales in the face of the current economic downturn and record oil prices, Honda Motor Co., Japan's second-largest automobiles manufacturer, has unexpectedly benefited from the prevailing conditions which have spurred demand for its fuel-efficient Fit and Civic cars.

Consequently, it today announced an 8.1 per cent jump in quarterly profit. The results came a day after US automaker Ford Motor Co. reported its worst quarterly loss ever. (See: Ford announces $8.7-billion quarterly loss, goes for major restructuring)

GM, which lost $3.3 billion in the first quarter, is closing four North American assembly plants, cutting thousands of jobs, selling assets and suspending its dividend in an effort to raise cash. (See: GM to cut thousands of jobs, save $15 billion under new restructuring plan)

Net income totaled 179.6 billion yen ($1.7 billion), or 98.98 yen a share for the three months ended 30 June, compared with 166.1 billion yen, or 91.38, a year earlier, the company said in a release today.

Higher raw-materials costs will trim annual operating profit by 199 billion yen, more than double the company's initial estimate of 74 billion yen, Executive Vice President Koichi Kondo said at a press conference in Tokyo.

The company will build 50,000 fewer Pilot and other light trucks than initially planned in North America, Kondo said. In contrast, it will boost production of Civics by 20,000 units in North America.