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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 — and Camry — shine in mixed U.S. January vehicle sales

DETROIT — Automakers posted mixed U.S. new vehicle sales data for January, with American consumers continuing to abandon passenger cars for the larger pickup trucks, SUVs and crossover models that manufacturers also love because they are far more profitable. Total industry auto sales for the month rose 1 percent versus January 2016. According to Autodata Corp, which tracks industry sales, the seasonally adjusted annualized rate (SAAR) of U.S. car and light truck sales in January fell to 17.12 million units from 17.44 million a year earlier. Analysts polled by Reuters had expected a January SAAR of 17.2 million units. U.S. auto industry sales fell 2 percent in 2017 to 17.23 million vehicles after hitting a record high in 2016 and are expected to drop further in 2018 despite a solid economy. Interest rates are rising and around 4 million late-model used cars will return to dealer lots this year to compete with more expensive new ones. Automakers have used consumer discounts to boost sales, a growing concern for observers who say this undermines resale values and profits. Discounts declined in January, but remained above 10 percent of manufacturers' recommended prices. ""I think the industry has accepted that (sales) volumes will fall somewhat in 2018 ... and I don't think the industry is going to go over the cliff with insane incentives," Mike Jackson, chief executive officer of AutoNation Inc, told Reuters after his company, the largest U.S. auto retail chain, posted a higher quarterly net profit. Mark Wakefield, head of the North American automotive practice for consultancy AlixPartners, had a gloomier perspective. The industry's less-than-stellar sales performance for January showed "we are now past the peak," he said. "Automakers are now selling the deal instead of the vehicle," he said. "That's a tough spot to be in because that treadmill is hard to get off once you're on it." General Motors January sales rose 1.3 percent, driven by a 16 percent rise in fleet sales. Sales to consumers fell 2.4 percent. GM posted strong gains for models such as the Silverado pickup truck and Equinox crossover model, while its passenger cars continued to struggle. Ford The Blue Oval posted a 6.6 percent sales decline for January, with retail sales down 4.3 percent. Sales of Ford's F-Series pickup trucks - America's best-selling vehicle brand for decades — rose 1.6 percent. Passenger cars were down more than 23 percent.

Does the 2017 Honda Ridgeline have street cred?

From a sales standpoint, the gen-one Ridgeline was an utter failure. It had a very narrow appeal, that being the suburban Harry Homeowner crowd. Traditional truckers hated it; no, make that HATED it! They hated it as much for what it was as for what it represented. It was assumed to be soft, a mommy truck; and to their eyes, it was ugly as sin. "Real" truckers would not accept the independent rear suspension, yet seemed ignorant about the fact that our military has been using IRS on severe-duty trucks for years. If IRS is good enough for the combat conditions, using it on a light-duty civilian pickup truck should be a piece of cake, no? I think there's also another issue at play here: classism. I suspect that many truckers didn't like those who were buying these trucks. Ridgeline buyers tend to be college-educated, suburban, and earn enough to have a decent if not better-than-average lifestyle. Many were schoolteachers, accountants, doctors, and lawyers – professionals. In short they weren't blue-collar, hard working, struggling-to-make-a-living truck guys. That didn't sit well with many. It was like their "space" was being invaded, maybe even their lifestyle was being threatened. I can't tell you how many derogatory comments I've read from traditional truckers over the last decade directed against Ridgeline owners. Many centered around a lack of masculinity of Ridgeline owners, or that that they were bought by people who didn't "need" a truck, that a minivan would have been a better choice. Many were owners of big diesel pickups who felt compelled to compare their heavy-duty trucks to this smaller mid-size truck. You get the picture. So here we are with the gen-two Ridgeline. Has Honda rectified its image as a truck maker? Yes and no. Yes in that the truck has shed its polarizing looks. In fact I think it's quite handsome, and will have a vastly broader appeal as such. Yes in the fact that it's been brought up to date mechanically, and the technology is vastly superior to the old model. Yes in fact that it should prove to be more economical than the old truck. Yes in the fact that it's more powerful, and that the AWD is vastly superior to what was offered before. Yes in the fact that it should function better, both as a truck and as a family vehicle. No in the fact that it will still be viewed as a "girlie truck" by many. No in the fact that there is no "macho" trim level available.