Honda Surprises With 20 Percent Rise in Profits
Today, Honda surprised many by reporting a 20% increase in fiscal first quarter profits. Apparently, the costs of the Japanese automaker’s airbag recall were offset by the benefits of a cheap yen.
Honda’s April-June net profit was 186 billion yen ($1.5 billion USD), representing a 155.6 billion yen year-over-year increase. Somewhat remarkable when you consider the fact that Honda estimates it has had to recall 24.5 million vehicles worldwide due to faulty airbags manufactured by Takata.
Honda hasn’t said how much it’s spent specifically on completing the recalls, but the costs are part of the 60 billion yen ($484 million) overall sales and administrative expenses for the fiscal year through March 2016.
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Much of the car company’s success is being attributed to the cheap yen, which has increased the overseas earnings of Japanese exporters such as Honda. North America has been a large part of Honda Motor Co.’s profits, with the continued strong sales of the CR-V crossover SUV and the introduction of new models including the HR-V sport utility vehicle and the Acura TLX luxury sedan.
Despite the unexpected good news, Honda’s not changing its overall forecasts for the year. The automaker is still projecting a 525 billion yen ($4.2 billion) profit and 4.7 million vehicles sold worldwide for the fiscal year through March 2016.
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