Official: Honda reports $1.9 billion profit in first quarter despite sales lag at home

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By Brandon Turkus

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Ford, General Motors and Chrysler have been living in a world of sunshine and buttercups after their April-through-June financials hit the newswire, and Toyota is doing pretty good as well. Honda? Not so much.

While Japan’s third-largest manufacturer saw $1.9 billion in profits, the 5.1-percent jump was lower than expected thanks to a drop in its home-market sales. US sales also took a sting, as Honda hasn’t been able to match the SUV and truck demand that are currently permeating the American market, despite an uptick in Accord sales.

Honda’s initial forecasts targeted a take of 209.3 billion yen ($2.1 billion at today’s rates), and while a $200 million shortfall is nothing to sniff at, we’d hardly take this as Honda being in trouble. And even with the dip, Honda hasn’t adjusted its forecast for the fiscal year, which remains at 780 billion yen ($7.9 billion).

Still, the cause of the problem for Honda isn’t one that’s easily solvable. Accord sales were strong, helping the brand move 745,578 vehicles during the first half of 2013, which is a six-percent improvement in year-over-year sales. Yet, Honda’s market share shrunk by 0.1 percent, and the Japanese manufacturer’s lack of competitive SUVs and pickups is worrying. In the short term, though, the arrival of the new Acura MDX in North American dealerships should deliver a small shot in the arm.

Honda’s home-market issues are also troubling, with Reuters reporting a 24-percent drop in sales, thanks to the discontinuation of government subsidies. All told, this isn’t the rosy outlook we’ve gotten used to since the latest batch of earnings came out.

Continue reading Honda reports $1.9 billion profit in first quarter despite sales lag at home

Honda reports $1.9 billion profit in first quarter despite sales lag at home originally appeared on Autoblog on Wed, 31 Jul 2013 16:00:00 EST. Please see our terms for use of feeds.

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