Economy, Auto

Japanese Automakers Issue Profit Warnings

Japanese Automakers Issue Profit WarningsJapanese Automakers Issue Profit Warnings

Two Japanese automakers, including Honda Motor, issued profit warnings for the current financial year on worries a stronger yen would erode their operating earnings, wiping out the impact of record high global vehicle sales. The outlook highlights fears of a rising yen disrupting an export-led recovery of Japan’s economy. For the country’s automakers, it is a double whammy: they have to battle currency fluctuations even as they navigate mounting competition in their biggest markets, China and the United States, Reuters reported. Honda on Friday forecast a surprise 16% drop in operating profit to 700 billion yen ($6.40 billion) for the year to March 2019, versus a consensus estimate for a rise, while Mazda Motor Corp projected a wider-than-expected drop of 28% to 105 billion yen. “Last year our forex rate was 111 yen and this year we are expecting 105 yen, so we’ll feel a big currency impact from exports of auto parts and finished vehicles,” Honda’s senior managing director, Kohei Takeuchi, told reporters at a briefing. 

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