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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 teases a new compact SUV for Geneva

Mazda waited until the lights were out to tease the tidy rear end of a brand new crossover. The Japanese automaker didn't say much about the model that will debut at the Geneva Motor Show next month, only calling it "a brand-new addition to the Mazda lineup," and "the second model in new-generation lineup." We're going to put our chips down on this being the next CX-3 crossover, which has been predicted to arrive by 2020. If that's so, we can expect a larger model than the one currently on sale. The present, first-gen CX-3 rides on the Mazda2 platform. The coming CX-3 will use the Skyactiv Vehicle Architecture supporting the new Mazda3, growing out of the subcompact class into the compact segment. According to one report last year, the extra girth is a play for better sales in the U.S. market. In 2017, Mazda sold more CX-3s in Australia than in the U.S. The stronger, stiffer platform will introduce Mazda3's delights such as the human-centric interior ergonomics, and hopefully the same driving dynamics that we called "the life of the compact sedan party" in our Mazda3 First Drive. Yes, that's all but certain to mean a torsion beam rear suspension, which was said to have been done for NVH reasons after Mazda said it "got a lot of complaints from the media" over the multi-link rear. The engine lineup should mirror the Mazda3 in the U.S., being the naturally aspirated 2.5-liter four-cylinder at launch, followed by the Skyactiv-X. We can probably expect more teasers before Geneva press days kick off on March 5. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Mazda plans a new crossover for 2021

If Mazda is going to increase sales, it's going to need more crossovers. According to company CEO Masamichi Kogai, a new crossover that won't cannibalize sales of the CX-3, CX-5, and CX-9 is coming in 2021, to be built at the new U.S. factory Mazda is building in partnership with Toyota. The plant will be able to build 150,000 vehicles per year, and that full capacity will be reserved for the new CUV. With 112,235 units sold, Mazda's best-selling vehicle in the United States last year was, not surprisingly, the CX-5. With that in mind, it seems a safe bet that the new crossover will be a replacement for the discontinued CX-7 to slot above the CX-5 and below the CX-9. Kogai told Automotive News that the vehicle will be designed for America and built exclusively in the States. "We are actually going to introduce a totally new and different type of SUV," said Kogai. We don't know exactly what that means, but we hope the new model line follows Mazda's tradition of crossovers that are more fun to drive than their main competitors. Related Video: