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Honda sees sales up but profit sliding 16 percent in 2017-18

TOKYO - Honda forecasts a 16 percent fall in operating profit for the current financial year as the Japanese automaker sees higher auto sales being offset by a stronger yen and research-and-development costs. Japan's No. 3 automaker said it expects an operating profit of 705 billion yen ($6.34 billion) in the current FY2018, down from 840.7 billion yen posted in the fiscal year just ended, and lower than an average estimate of 850.8 billion yen from 23 analysts polled by Thomson Reuters I/B/E/S. It sees a 14 percent slide in net profit to 530.0 billion yen this year, down from 616.5. Honda's projections are based on a forecast that the yen will average 105 yen to the U.S. dollar through next March, stronger than the 108 yen rate in the year just ended.BUT CAR SALES ARE UP At the same time, there's good news as Honda expects its global vehicle sales to edge up 1 percent to 5.08 million this year, bolstered by growth in Asian sales to 2.06 million units, beating out North America to become Honda's top market as more Chinese drivers flock to its cars. The company expects to sell 1.92 million vehicles in North America, 2.5 percent less than the year just ended as it struggles to sell sedans including the Accord, which have fallen out of fashion in the past few years. Honda has been ramping up production of SUVs to keep up with strong demand for larger models in the United States, although overall vehicle sales show signs of slowing following a boom cycle after the global financial crisis. Mazda is taking a similar strategy, announcing on Friday it would expand production of SUV crossover models at home, while equipping overseas plants to enable more flexible production of models according to market needs. Japan's No. 5 automaker forecast a 19 percent jump in operating profit for the current financial year as it expects higher sales volumes, particularly in North America, to help it recover from last year's profit slump.A CONSERVATIVE OUTLOOK Executive Vice President Seiji Kuraishi acknowledged that Honda's expected currency hit of 95 billion yen was based on a "conservative" yen forecast, adding that growing costs to create next-generation cars would also impact earnings. "Our costs are rising to develop new technologies which will be needed in the future, like automated driving functions and electric cars," he told reporters at a results briefing.

Mazda planning not one but two new crossovers for U.S.

Mazda has already announced plans to unveil a brand new crossover at the Geneva Motor Show, but it turns out there's another one in the pipeline set to satiate the appetites of a crossover-mad U.S. market. Speaking at the Chicago Auto Show, Mazda North America CEO Masahiro Moro told reporters the brand has another model planned for production at the $1.6 billion plant under construction with joint-venture partner Toyota in Huntsville, Ala. It'll be "a new crossover SUV which is exclusively designed for the North American market," Automotive News quoted Moro as saying. While it'll be a different product from the one debuting next month in Geneva, the two vehicles will share some architecture. The company is reportedly still finalizing the concept for it. Currently, Mazda sells three crossovers in the U.S.: the subcompact CX-3, the compact CX-5 and the larger CX-9. Together, the three vehicles, which constitute half of the tiny automaker's vehicle lineup, posted sales of 195,778 for 2018, up 15.8 percent from 2017. They accounted for nearly two-thirds of the brand's total vehicle sales of 300,325. Production is expected to start at the new Alabama plant in mid-2021, Moro said, and add capacity for 150,000 units of crossovers. The plant is expected to employ up to 4,000 workers with a total capacity of 300,000 vehicles a year. Toyota plans to build the Corolla there alongside Mazda's crossovers. Mazda last week released the teaser pic shown above of its forthcoming new crossover headed for Geneva. It could be the next and slightly larger version of the CX-3, which will use the Skyactiv Vehicle Architecture that also supports the new Mazda3. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Toyota delays Mexico plant as it plans U.S. plant with Mazda

TOKYO — Toyota will push back the start of operations at its scheduled new plant in Mexico, to the first half of 2020 from the initial plan of 2019, the company said on Thursday. Japan's top automaker had initially planned to start building the Corolla sedan at the $1 billion Guanajuato plant but said last week it would switch production to a new U.S. factory to be built with Mazda. Toyota said the delay was necessary to adjust its supply chain in Mexico to produce the Tacoma pickup instead of the Corolla compact car. That factory could also build sport utility vehicles, a Toyota spokesman in Mexico said last week. "With the production model change to the Tacoma pickup, the start of production will consequently be in the first half of 2020," a Toyota spokeswoman said. "However, we will make our utmost effort to advance the timing in order to minimize the impact to suppliers and the local community." Until the scheduled start of the joint venture plant with Mazda in 2021, Toyota will supply the Corollas that were initially slated to be built in Mexico from its factories in Mississippi and Japan, the company said.Related: Mazda-Toyota partnership has us dreaming of a rotary hybrid Reporting by Makiko YamazakiRelated Video: