Honda records 20% profit rise on yen, despite recalls
Tokyo — Japanese automaker Honda reported Friday a 20 percent jump in fiscal first quarter profit on the back of a cheap yen that offset the damage from a massive air bag recall.
Honda Motor Co.’s April-June net profit totaled 186 billion yen ($1.5 billion), up from 155.6 billion yen the same period the previous year.
Quarterly sales gained nearly 16 percent to 3.7 trillion yen ($29.9 billion).
The Tokyo-based maker of the Accord sedan and Odyssey minivan has been the hardest hit among automakers from the costs related to a global recall of Takata Corp.’s air bags that can explode.
Takata has recalled almost 34 million air bag inflators in the United States. Globally, the recalls number more than 57 million, although some of the vehicles are being recalled more than once.
At least eight people have been killed and 100 have been injured by Takata air bags, which can explode with too much force and spew shrapnel into the vehicle.
Honda, which has a stake in Takata, relies heavily on the Tokyo-based air bag and seatbelt maker.
Honda estimates its recalls related to Takata air bags worldwide at 24.5 million.
It did not break down costs for the quality woes, but said that was part of the overall sales and administrative expenses estimated at 60 billion yen ($484 million) for the fiscal year through March 2016.
Results got a boost from healthy sales, especially in North America, where it introduced the HR-V sport utility vehicle and Acura TLX luxury model. The CR-V crossover also did well in the region.
The cheap yen, which lifts the overseas earnings of Japanese exporters, also helped. The dollar has been trading at 120 yen levels, up sharply from about 102 yen a year ago.
The favorable perk from currency exchange rates helped lift sales by nearly 378 billion yen ($3 billion) for the April-June quarter.
Honda left its forecasts unchanged, projecting a 525 billion yen ($4.2 billion) profit for the fiscal year through March 2016. That would mark a 3 percent on-year rise.
It expects to sell 4.7 million vehicles around the world for the fiscal year, up from nearly 4.4 million vehicles for the previous fiscal year, which ended March 2015.