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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 engineers say current Skyactiv-X might not suit U.S. market

We've been watching Mazda roll out the 2.0-liter four-cylinder Skyactiv-X engine in Japan and Europe, waiting our turn. When European authorities released fuel economy information for the high-tech motor last June, we wrote, "Mazda has yet to make an official decision on timing for the U.S market's launch of the engine." Automotive News spoke to Mazda engineers in charge of the powertrain, and based on the answers AN got, the question might not be when we get the Skyactiv-X, but if. Seems that the automaker now isn't certain whether the cost/benefit analysis for the U.S. market favors the engine, and there's concern the 2.0-liter might not be powerful enough for us with its current output of 178 horsepower and 186 pound-feet of torque. At the moment, our Mazda3 is served only with a 2.5-liter Skyactiv-G engine producing 186 hp and 186 lb-ft., not too far ahead of the Skyactiv-X. The Skyactiv-X would return better fuel economy, but requires a noteworthy price premium over the Skyactiv-G. The Truth About Cars says the Skyactiv-X has become the top-seller in the Japanese-market Mazda3, even though it costs 27% more than the base, 2.0-liter Skyactiv-G for a 9% improvement in fuel economy. Mazda's not sure U.S. customers would care much for that kind of math. Engineer Yoshiaki Yamane told AN, "Maybe U.S. customers require more power, because fuel economy is not the top requirement." There isn't much Mazda can do about the tech-heavy engine's cost, since pricey equipment like the high-pressure fuel injection and combustion systems, supercharger, three-way catalyst, and 24-volt mild-hybrid system provide the mileage gains that are the engine's reason for being. Instead, engineers are researching the system's effects with larger displacements. If it works as desired, a larger and more powerful Skyactiv-X could come to the U.S. on the large-vehicle architecture Mazda's developing for new sedans to arrive in a couple of years. That's the hope, at least. Remember, Mazda's Skyactiv-D was meant to go into the 2014 Mazda6, but didn't because Mazda said it needed more time to find "the right balance between fuel economy and Mazda-appropriate driving performance." After five years of "Soon," the engine showed up on the 2019 CX-5 that starts at $42,045. Based on that template, it could be awhile before we know how the U.S.-market Skyactiv-X story ends. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences.

Mazda files patents for a sequential twin-turbo setup

Mazda has a history of interesting engine technologies, from yesterday's rotary engine to tomorrow's compression ignition engine, and new patents show it still may have some internal combustion tricks up its sleeve. The one on display in these patents isn't especially new in concept, though. A sequential twin-turbocharger setup is something Mazda itself used on the third-generation RX-7. But it's something we haven't seen much of lately. It looks like it could have some possible advantages over older sequential systems, and it has some potential advantages for enthusiasts. First a quick and dirty primer for what makes a sequential twin-turbo system distinct from other twin-turbo systems. In many twin-turbo engines, there are simply two turbos that work together as one bigger turbo. They're the same size, and they spool up at the same time. With a sequential setup, at low rpm, a smaller turbocharger is spooled up first at low-rpm for quicker throttle response, and as the rpm and exhaust pressure increases, a valve opens up that allows a larger turbocharger to also spool up and provide high-rpm boost. That's basically how the Mazda design shown above functions. A big flap blocks off the larger turbocharger exhaust inlet, channeling all the exhaust to the smaller turbo. When more exhaust is available at high rpm, it looks like that flap opens up to spool up the big turbo, too. What's interesting here is that the way the turbochargers are packaged takes up less space than past systems. It looks like both turbos are contained in one unit that shares the same exhaust outlet, meaning the exhaust manifold could be kept simple and compact. In fact, the piping for compressed intake air could also be shared, reducing the amount of piping, which would further decrease the amount of materials and possible failure points. There are a number advantages of making this system smaller. The potential applications of the system are much greater, since it could fit in smaller cars with smaller engine bays. Making the system smaller also means that there won't be as much weight, which is important from both fuel economy and performance standpoints. Finally, the smaller setup likely uses fewer materials, which could make the system cheaper and thus easier to offer on a wider range of vehicles, or at least more profitable for Mazda.