Profit soars at Honda, Mazda despite strong yen

AP News
Posted: Oct 29, 2010 5:13 AM

Japanese automakers Honda and Mazda posted hefty profits despite a strengthening yen as the global recovery and government incentives for green cars drove sales higher.

Honda, the manufacturer of the Insight hybrid, Accord sedan and Asimo human-shaped robot, said Friday its second quarter profit more than doubled to 135.93 billion yen ($1.68 billion) from 54 billion yen the year before.

Tokyo-based Honda Motor Co. also raised its profit forecast for the full year through March 2011 to 500 billion yen ($6.2 billion) from its earlier projection of 455 billion yen ($5.6 billion). That would mark an 86 percent jump from the previous year.

Mazda's second quarter profit surged more than 10-fold as car sales grew at home and abroad. Its net profit was 7.62 billion yen ($94.4 million) for July-September, up from 707 million yen the year before.

The results show the resilience of the Japanese automakers amid a battering from a plunging dollar, which erodes the value of overseas earnings of this nation's exporters.

The automakers have seen their Japanese sales jump, helped by tax breaks and incentives for fuel-efficient green cars. But some of the incentives started expiring last month, and the perk from rush-buying could trail off.

Nissan Motor Co. reports earnings Nov. 4 and Toyota Motor Corp., the world's biggest automaker, reports its results Nov. 5.

Quarterly sales at Honda rose 9.5 percent to 2.252 trillion yen ($27.9 billion) on solid global demand for its vehicles.

Honda, which is in a neck-and-neck race against Nissan for the spot of Japan's No. 2 automaker in global vehicle sales, sold 898,000 vehicles during the quarter globally, up 7.2 percent from the previous year.

Mazda Motor Corp., the Hiroshima-based manufacturer of the Miata roadster and RX-8 sports car raised its profit forecast for the full year through March 2011 to 6 billion yen ($74.3 million).

Quarterly sales rose 3.1 percent to 579.66 billion yen ($7.18 billion).

Mazda, Japan's No. 4 automaker, said it had strong sales in Japan, North America, China and Thailand, reflecting the popularity of models like the Mazda5 and Mazda2.

Mazda sold 342,000 vehicles during the quarter, up nearly 8 percent from the year before.

The only major region to see a sales decline for both Honda and Mazda was Europe, where the market has been stagnant since the effects of incentives wore off.

The yen hitting a series of 15-year highs against the dollar is also casting a shadow over the prospects for all Japanese automakers.

Still, Honda is expecting to sell 3.6 million vehicles for the year through March 2011, up nearly 7 percent. Mazda is equally upbeat, targeting sales of 1.3 million vehicles, up 10.6 percent.