Friday, 30 January 2015

Honda cuts annual profit forecast after recall

Honda logo


The Japanese carmaker Honda has cut its profit forecast and seen third quarter earnings drop sharply following a vehicle recall linked to airbags.
Honda, whose products include Civics and Accords, is forecasting full year net profits of 545bn yen ($4.6bn, £3bn) 3.5% less than it previously hoped.
Third quarter net income was down 15% at 136.5bn yen.
Honda has had to recall millions of vehicles amid an exploding airbag crisis in which five people died.
Honda has already been fined $70m by the US authorities, a record civil penalty for a carmaker, for not telling regulators about 1,700 complaints about deaths and injuries caused by its vehicles, and for not reporting warranty claims.
The airbags are supplied by fellow Japanese company, Takata.
Aside from that crisis, sales in its home market were dented by a recently introduced sales tax.
Overall, though, sales for the past nine months were up by 6.3%.
The weak yen flattered repatriated profits for the whole nine-month period, leaving net profits for the period 5.3% higher.
The move will help it set aside more cash to pay for an expanded recall of its cars to replace potentially faulty air bags made by supplier Takata.

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