Honda COO Seiji Kuraishi said the automaker’s sales in the U.S. were rebounding quicker than the industry average.
Japanese automaker Honda reported an operating loss of $1.07 billion, or 113.6 billion yen, on revenue as the global pandemic hampered sales in across the board.
Officials predicted the company would be profitable for the fiscal year, which ends March 2021, but it would make less than half of what it did the previous year. Honda said it would record a net profit of 165 billion yen, down 63.8% from the previous year, on sales of 12.8 trillion yen, which would be down 14.3 percent.
For the April–June quarter, the company recorded a net loss of $752.4 million, or 80.9 billion yen compared with a net profit of $1.6 billion, or 172.3 billion yen, for the same period a year ago.
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Honda sales in the U.S. have been on the rebound, and coming back more quickly than the average.
Sales revenue for Q1 fell 46.9% to $20.1 billion, or 2.12 trillion yen. The company’s sales declined, like most others, forcing the automaker to suspend vehicle production around the world at various times during the first quarter, COO Seiji Kuraishi noted during the company’s online news conference.
“In the four-wheel business, we suspended production in 12 out of 17 countries as of the end of April, but now we’ve resumed operation in all production bases,” he said. “We will swiftly move towards getting our products into the market from the second quarter.”
Despite the quarterly loss, company officials were seeing signs of recovery on a few markets, including the U.S., which did endure sales declines during the quarter. However, Kuraishi noted Honda was recovering more rapidly than the general market.
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Despite the current pace of recovery, he expects sales to slow in the U.S. and the company’s home market, Japan.
Honda’s plants around the world have been shut down for extended periods during the pandemic.
It’s possible that the automaker could make progress in China. The country, which suffered through the pandemic first, is posting improving sales. Part of this is due to government incentives aimed at getting potential buyers back into dealer showrooms, the company noted.
Honda is expecting to recover from the unfavorable impact of the COVID-19 toward the end of the fiscal year; however, the current fiscal year forecast for profit before income tax includes an approximately $6.3 billion, or 665 billion yen, impact of the COVID-19.
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Officials noted the company plans to continue looking for ways to “further enhance its earnings structure by making steady progress in on-going initiatives to improve its business structure.”