Takahiro Hachigo, president and chief executive officer of Honda Motor Co., attends a news conference in Tokyo on Wednesday. Honda’s annual operating profit fell short of the automaker’s own forecast, dragged down by a loss in the fourth quarter.
Honda reported a loss for January-March Wednesday, despite growing sales, as an unfavorable exchange rate, income tax expenses and other costs hurt results.
Honda Motor Co. reported a ¥13 billion ($118 million) loss for the fiscal fourth quarter, a reversal from a ¥107.7 billion profit the previous fiscal year.
Quarterly sales rose 3 percent to ¥4.05 trillion ($37 billion).
For the fiscal year through March, Honda recorded a ¥610.3 billion ($5.5 billion) profit, down 42 percent on year because of an absence of a U.S. tax break, which boosted earnings the previous year.
Chief Executive Takahiro Hachigo announced Honda will streamline its product offerings, consolidating model variations, and increase parts-sharing to cut costs, with the first model developed under the new “architecture” launching next year.
Inter-regional cooperation will reduce manpower needs by a third, which will instead be used for research and development, he said.
In North America, a critical market for the Japanese automakers, Honda will reduce model options to realize growth, he added.
For the fiscal year through March 2020, Honda expects a ¥665 billion ($6 billion) profit, up 9 percent.
Image Credit: Bloomberg