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Honda profit declines on semiconductor crunch and raw material costs

TOKYO — HondaÂ’s fiscal first quarter profit fell 33% from last year as a global computer chip shortage, a pandemic-related lockdown in China and the rising costs of raw materials hurt the Japanese automaker. Tokyo-based Honda Motor Co. reported Wednesday that its profit totaled 149.2 billion yen ($1.1 billion) in the April-June quarter, down from 222.5 billion yen ($1.7 billion) a year earlier. Quarterly sales slipped 7% to 3.8 trillion yen ($28 billion). Honda kept its profit forecast for the full fiscal year through March 2023 unchanged at 710 billion yen ($5.3 billion). The semiconductor shortage has hurt all the worldÂ’s automakers, including Honda, despite strong demand, and the manufacturers have been scrambling to secure alternative suppliers. Honda, which makes the Accord sedan, Odyssey minivan and Civic compact, sold about 815,000 vehicles last quarter, down from 998,000 vehicles the same period a year earlier. Auto sales dropped in almost all regions around the world, including Japan, the U.S. and Europe. “I ask for the understanding from all those who are still waiting for their vehicles and vow that our whole company is doing its utmost to make the deliveries even a day sooner,” Chief Financial Officer Kohei Takeuchi said. Takeuchi said the semiconductor shortage curtailed motorcycle production as well as car production, adding to uncertainty about future prospects. Honda said the recent lockdown in Shanghai was among the causes of the shortage in computer chips supply but declined to give specifics. Although U.S. sales are potentially facing a dent from recession worries and other economic hardships, Takeuchi acknowledged he was more worried about the shortage problem and producing the cars customers were waiting for. Takeuchi noted that motorcycle sales for the quarter, which grew to 4.25 million motorcycles from 3.88 million a year earlier, were going strong, especially in India. The cheaper yen and cost cuts helped maintain profitability overall, he added. The yen has been at a two-decade low against the U.S. dollar. A cheap yen has historically worked as a boon for exporters like Honda by boosting the value of their overseas earnings when converted into yen. But it also increases costs for imported components and materials. JapanÂ’s top automaker Toyota Motor Corp. reported recently that its fiscal first quarter profit fell nearly 18%. Nissan Motor Co. saw its quarterly profit plunge to less than half of what it was a year earlier.

A look inside Honda’s “Safety For Everyone” research and development operation

RAYMOND, Ohio—As part of its long-running “Safety for Everyone” campaign, Honda has established the audacious goal of what it calls a “zero-collision society.” But rather than making big claims about developing a fully-autonomous vehicle, which Honda hasnÂ’t done, the company is trying to chip away at the more than 37,000 vehicle-related fatalities that occurred in the U.S. in 2017 with a multi-pronged approach. Here in central Ohio, engineers are working with state-of-the-art facilities and equipment to boost active safety systems like its HondaSensing suite of safety technology with old fashioned passive systems like structural steel frames or new airbag designs that protect passengers in a crash. Honda provided members of the press with a rare tour inside its Honda R&D Americas headquarters this week. Honda officials say that increasingly, safety — and specifically, third-party ratings from the likes of the National Highway Safety Traffic Administration and the Insurance Institute for Highway Safety — figure into the top three factors consumers weigh when purchasing a vehicle. Honda and Acura have 10, 2019 models that have earned IIHSÂ’s Top Safety Pick or Top Safety Pick+ ratings, and all 15, 2019 model-year Honda and Acura vehicles that have undergone NHTSA crash testing have earned a 5-star overall rating. And Honda prides itself on its growing list of safety firsts, including the first upward-deploying front passenger airbag, in 1990 in the Acura Legend; first omni-directional crash-test facility, in 2000; and the first autonomous braking system, in the 2006 Acura RL. It hopes its new three-chamber airbag goes industry-wide and joins that list. “ItÂ’s part of our companyÂ’s culture,” said Art St. Cyr, business head unit and vice president of auto operations for American Honda Motor Co. “We have a philosophy at Honda that we want to be a company that society wants to exist. That means we have to protect our customers. ThatÂ’s part of the whole mantra of doing this.” Opened in 1984, the 1.6 million square-foot Honda R&D Americas facility, located in the countryside about 45 miles northwest of Columbus, employs around 1,600 people and is HondaÂ’s largest research-and-development facility outside of Japan. Its Advanced Safety Research facility opened in 2003.

Consumer Reports no longer recommends Honda Civic

Consumer Reports annual Car Reliability Survey is out, and yes, there are some big surprises. First and foremost? The venerable publication no longer recommends the Honda Civic. In fact, aside from the walking-dead CR-Z and limited-release Clarity fuel-cell car, the Civic is the only Honda to miss out on CR's prestigious nod. At the opposite end there's a surprise as well – Toyota and Lexus remain the most reliable brands on the market, but Buick cracked the top three. That's up from seventh last year, and the first time for an American brand to stand on the Consumer Reports podium. Mazda's entire lineup earned Recommended checks as well. Consumer Reports dinged the Civic for its "infuriating" touch-screen radio, lack of driver lumbar adjustability, the limited selection of cars on dealer lots fitted with Honda's popular Sensing system, and the company's decision to offer LaneWatch instead of a full-tilt blind-spot monitoring system. Its score? A lowly 58. The Civic isn't the only surprise drop from CR's Recommended ranks. The Audi A3, Ford F-150, Subaru WRX/STI, and Volkswagen Jetta, GTI, and Passat all lost the Consumer Reports' checkmark. On the flipside, a number of popular vehicles graduated to the Recommended ranks, including the BMW X5, Chevrolet Camaro, Corvette, and Cruze, Hyundai Santa Fe, Porsche Macan, and Tesla Model S. Perhaps the biggest surprise is the hilariously recall-prone Ford Escape getting a Recommended check – considering the popularity of Ford's small crossover, this is likely a coup for the brand, as it puts the Escape on a level playing field with the Recommended Toyota RAV4, Honda CR-V, and Nissan Rogue. While Ford is probably happy to see CR promote the Escape, the list wasn't as kind for every brand. For example, of the entire Fiat Chrysler Automobiles catalog, the ancient Chrysler 300 was the only car to score a check – there wasn't a single Dodge, Fiat, Jeep, Maserati, or Ram on the list. That hurts. FCA isn't alone at the low end, either. GMC, Jaguar Land Rover, Mini, and Mitsubishi don't have a vehicle on CR's list between them, while brands like Mercedes-Benz, Volvo, Nissan, Lincoln, Infiniti, and Cadillac only have a few models each. You can check out Consumer Reports entire reliability roundup, even without a subscription, here.