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By Naomi Tajitsu
TOKYO (Reuters) – Japan’s Honda Motor Co predicted a 68-year-annual operating profit drop to a 10-year low on Wednesday, as global demand for automobiles is expected to decline due to the coronavirus pandemic.
The country’s number 3 automaker expects its profits to fall to two hundred billion yen ($1.89 billion) until the end of March 2021, its lowest level since 2010/11 and underestimating analyst estimates.
Honda is preparing for a 6% drop in annual vehicle sales after a 40% drop in the June quarter, resulting in a loss of 113.7 billion yen.
Global automakers are hit by the coronavirus outbreak, which closed vehicle factories this year and prevented car dealerships from consumers.
The manufacturer of the SUV CR-V crossover and its compact sedan compatibility plans to sell 4.5 million cars this year, up from 4.79 million last year. He predicts a 16% drop in sales in North America, a key market where the United States is experiencing an outbreak of viral infections.
“If the existing scenario continues as it is, we believe the scenario won’t get worse (what we saw earlier this year), however, it will take time for the call to return to pre-pandemic levels,” executive vice president Seiji Kuraishi said. said live. Record.
Despite weaker sales in North America, Honda expects annual sales in Asia to rise to 8%.
China, one of Honda’s largest markets, has a rare bright spot for many global automakers, as demand in the world’s largest automotive market has recovered faster than in other countries.
Honda sank in red for the consecutive quarter and recorded its worst operating loss since the March 2009 quarter.
Despite its disastrous outlook, Honda is more resistant to the coronavirus pandemic than rivals Nissan Motor Co, Mitsubishi Motor Corp and Mazda Motor Corp, which last week predicted record losses for the year.
(Report through Naomi Tajitsu; Edited by Tom Hogue, Sam Holmes and Gerry Doyle)