Honda Motor Co cut itsfull-year profit forecast for a second time on Friday as a persistent global shortage of semiconductors forces it to cut vehicle production and rising steel and material prices eat into profit margins.
Like other automakers, Honda’s production plans have been hit by the chip shortage, with global output in September falling 30 per cent from a year ago, even as demand in key markets, such as China rebounds from a pandemic slump.
“We believed supplies shortages would be limited, but we now see the supply shortage is more serious and will last longer,” Executive Vice-president Seiji Kuraishi said at a press briefing.
Honda was also dealing with rises in the cost of materials, including steel that were difficult to pass on to consumers, he added.
Honda’s latest forecast for a operating profit of ¥660 billion ($5.80 billion) for the year to March 31 is 15 per cent down form a prediction made in August, and lower than a mean forecast of ¥764.5 billion by 20 analysts, Refinitiv data showed.
Japan’s number 2 car company on Friday also cut its vehicle sales plan to 4.2 million vehicles from 4.85 million this business year, down from 4.5 million in the previous 12 months.
On Thursday, larger rival Toyota Motor cut its full-year sales target and warned the lack of semiconductors still posed risks to its annual production plans.
Honda’s Kuraishi said the company expect chip shortages toease after March and should not to affect its plans to a ccelerate a shift to electric cars and other zero-emissionvehicles.
The Japanese carmaker is aiming to increase its ratio of EVs and fuel cell vehicles (FCVs) to 100 per cent of all sales by 2040, with all new models in China be EVs or hybrid cars from 2030.
Self-driving technology
Honda is also developing self-driving technology, and say sit plans to put advanced driver-assistance systems in all of its models in major markets by 2030.
For the three months to September 30, Honda said operating profit fell by almost a third to ¥198.9 billion. That result was higher than an average forecast of 183.5 billion based on estimates from nine analysts, Refinitiv data showed