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Honda reports $2.3 billion profit despite pandemic

TOKYO — Japanese automaker Honda reported Friday that its profit rose 23% in the last quarter, despite a pandemic that has slammed businesses around the world. Tokyo-based Honda said its July-September profit was 240.9 billion yen ($2.3 billion), up from 196.5 billion yen a year earlier, as the auto market recovered in some parts of the world. Honda said it carried out aggressive cost cuts that involved a “fundamental review” of its operations. The situation was also improving from earlier this year, when lockdowns and other problems related to COVID-19 caused disruptions of some production and an inventory crunch. Quarterly sales slipped to 3.65 trillion yen ($35 billion) from 3.73 trillion yen the same period a year earlier. Honda warned that uncertainty remains amid rising COVID-19 cases. But the company stressed it was managing to cling to profitability. Reflecting that upbeat mood, Honda raised its profit forecast for the fiscal year through March 2021 to 390 billion yen ($3.8 billion) from an earlier projection for 165 billion yen ($1.6 billion). The latest forecast is still lower than the 455.7 billion yen profit Honda booked in the previous fiscal year. Honda sold slightly more vehicles in the quarter through September at 1.25 million vehicles, compared to 1.24 million vehicles in the same period of 2019. But it sold fewer motorcycles at nearly 4.5 million motorcycles, down from nearly 5.1 million. Kohei Takeuchi, a senior Honda manager, said much of the damage to sales likely came from the pandemic, though he hesitated to blame the entire decline on the pandemic. Executive Vice President Seiji Kuraishi told reporters Honda is bullish on shifting its lineup to ecological models to keep up with the global efforts to curb carbon emissions and global warming. Also Friday, Toyota raised its full year fiscal forecasts to a 1.4 trillion yen ($13.5 billion) profit, after reporting results that appear to show a gradual but sure recovery. Its profit fell 11% in the last quarter. Nissan reports financial results next week. Related Video: Earnings/Financials Acura Honda

Trucks, SUVs drive U.S. October new vehicle sales

DETROIT — Major automakers posted mixed U.S. new vehicle sales in October on Wednesday, though America's love affair with high-margin pickup trucks and SUVs remained in full bloom as larger, pricier vehicles fared better than passenger cars. Auto industry publication WardsAuto put the seasonally-adjusted annualized rate (SAAR) for light vehicle sales in October at a robust level of 18 million units. But after a long boom cycle, carmakers are still ill-prepared for the slight decline in sales anticipated for full-year 2017 and have taken too few steps to trim production, said Doug Mehl, a partner in consultancy A.T. Kearney's automotive practice. "When you make a new vehicle, you have volume assumptions tagged to it, and who wants to be the guy who says, 'I'm going to make less of this really cool model'?" Mehl said. "But eventually the market is the reality, and it's going to force companies one way or other here." General Motors GM reported a sales drop of 2.2 percent for the month, with consumer sales down 6.6 percent. But sales of high-margin pickup trucks, sport utility vehicles and crossovers all rose. GM also cut its inventory of unsold vehicles — a source of concern for the market — slightly. The automaker has worked to reduce its volume of excess inventory, including through significant production shutdowns in the third quarter. GM had said its inventory would rise in October. "We are heading into the fourth quarter with good momentum, thanks to a strong U.S. economy and very strong pickup and crossover sales," said Kurt McNeil, GM vice president for U.S. sales operations. GM slightly reduced consumer discounts as a percentage of average transaction prices to 13.5 percent, from 13.7 percent in the third quarter. Industry experts believe consumer discounts above 10 percent of the average transaction price are unhealthy as they erode resale values and are unsustainable in the long term. Consultants J.D. Power and LMC said last week that based on preliminary October sales numbers, discounts have exceeded 10 percent in 15 of the past 16 months. Ford The U.S. auto industry posted record sales of 17.55 million vehicles in 2016. New sales received a strong boost in September as consumers replaced vehicles damaged in southeast Texas by Hurricane Harvey the previous month. Full-year 2017 sales are expected to be slightly lower than 2016.

Honda Clarity goes on sale in Japan, but only 200 units a year

Honda has officially started leasing its Clarity hydrogen fuel cell vehicle to select customers in Japan, and the sedan should arrive at a few dealers in California late in the year. Once the model is available in the US, expect the Clarity to be the natural challenger to the Toyota Mirai FCEV. The Clarity boasts an electric motor with 174 horsepower and 221 pound-feet of torque. In Japan's JC08 test, Honda claims the sedan can travel the equivalent of 466 miles, but that evaluation is more lenient than its US equivalent. The automakers expects the sedan to receive an EPA-estimated driving distance of over 300 miles. Prices in Japan begin at the current equivalent of $67,800. However, examples here should retail for around $60,000 and lease for under $500 a month. The Toyota Mirai is similar to the Clarity in major categories, including an EPA range of 312 miles and leases for $499 a month. The two of them should have quite a fight. Honda plans to limit Clarity production to 200 units in Japan for the first year, and only government agencies or businesses can lease them there. After the company collects impressions from these clients, it intends to make the sedan available to individuals. The decision only to lease the Clarity at first evokes the early days at of electric vehicles when companies like General Motors used the strategy to get the EV1 to customers. One thing that could give Honda the edge in the upcoming hydrogen fuel cell battle is its history in the market. The company first offered them with the FCX and later followed up with the FCX Clarity. By this point, the automaker should be well acquainted with the process. Related Video: Honda Begins Sales of All-new Clarity Fuel Cell - Clarity Fuel Cell realizes the world's top-class cruising range among zero emission vehicles of approximately 750 km - TOKYO, Japan, March 10, 2016 - Honda Motor Co., Ltd. today began sales in Japan of its all-new fuel cell vehicle (FCV), the Clarity Fuel Cell. Striving to realize full-fledged popularization of FCVs, Honda created Clarity Fuel Cell as an FCV featuring both a high level of practicality that represents the "universal value" of an automobile and "cutting-edge appeal" that is suitable for a vehicle that is at the forefront of the times. Clarity Fuel Cell is the world's first*1 five-passenger sedan type FCV, realized by making the fuel cell powertrain more compact using original Honda technologies and fitting it entirely under the hood of the car.