Honda posts 15% fall in Q2 operating profit, missing forecasts


People are reflected on a Honda Motor car outside the company's headquarters in Tokyo, Japan. REUTERS/Toru Hanai/File Photo

TOKYO: Japan's Honda Motor reported a surprise 15% drop in second-quarter operating profit on Wednesday, missing analysts' expectations as it suffered a heavy sales decline in China.

Japan's second-largest automaker said operating profit was 257.9 billion yen ($1.68 billion) in the July-September quarter, marking the company's first year-on-year profit decline in seven quarters.

The profit compared to 302.1 billion yen in the same period last year, and the 427.2 billion yen average of seven analyst estimates in an LSEG survey.

The company maintained its full-year operating profit forecast of 1.42 trillion yen.

It said in presentation materials that its April-September sales result was lower than that of last year mainly due to pressures in China that offset higher vehicle sales in the U.S. and Japan.

Honda said last week its global vehicle sales shrank 1.5% to 2.8 million over the first nine months of the year, as a hefty 29% drop in China and a 6% fall in Asia and Oceania outpaced a stronger performance in its major U.S. and Japan markets.

Honda is especially losing ground in China, the world's top auto market, which was its biggest sales and production market from 2020 until 2022.

The company suffers from a rapid shift by consumers to electric vehicles, hybrids and plug-in hybrids made by Chinese brands. These brands have attracted local consumers with low prices and software-loaded vehicles.

Honda has been scaling back its workforce at joint ventures with Dongfeng Motor and Guangzhou Automobile Group this year and has halted production at some of its plants in a bid to make its operations more efficient.

The company has fared better in the U.S., reporting a 9% rise in vehicle sales over the first nine months of 2024. ($1 = 153.9000 yen) - Reuters

Follow us on our official WhatsApp channel for breaking news alerts and key updates!

Honda , motor

   

Next In Business News

Rate cut bets boost stocks as bitcoin breaks US$100,000
Malaysia to benefit from broad-based tariffs imposed by US in near term - MARC Ratings
UOB projects 4.7% GDP growth for Malaysia in 2025, driven by strong domestic levers, investments
T7 Global unit bags Petrofac contract
Deleum acquires 70% stake in Indonesian machinery firm for RM31mil
Dialog secures RAJA Cluster SFA production sharing contract
FBM KLCI sees early gains erased on profit-taking
PETRONAS awards four new production sharing contracts under Malaysia Bid Round 2024
Bitcoin tops US$100,000 on optimism over Trump crypto plans
Fertiliser producer Cropmate rises 22.5% on ACE Market debut

Others Also Read