Honda’s profits jump 20%
Japanese carmaker Honda’s profit jumped 20% in the first quarter thanks to strong sales in its biggest market, North America, and cost-cutting measures.
Its net profit rose to 186bn yen ($1.5bn; £960m) in April to June from 155.6bn yen a year ago – widely beating expectations of 145.7bn yen. The company said a weaker yen helped offset higher quality-related costs.
This news will be welcomed by Honda, as the firm has seen some bad press recently due to the recalls over faulty airbags made by troubled firm Takata.
Honda is Japan’s third biggest car maker and it has been the hardest hit by the continuing saga over a deadly defect in airbags made by Takata, with 24.5 million of its cars being recalled since 2008.
Seven people have been killed in Honda cars which were fitted with Takata air bags.
In a company statement Honda said, ‘There is a possibility that Honda will need to recognize additional provisions when new evidence related to product recalls arise,’
The statement continued, ‘However, it is not possible for Honda to reasonably estimate the amount and timing of potential future losses as of the date of this report.’
Honda also reported sales up by 15.5% to 3.7tn yen, led by a nearly 27% increase in sales in North America. Despite the recalls, the company still expects to make a net profit of 525 billion yen, up 3 per cent from the previous year.