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Honda profit dives 77% but remains in the black

 
1 1,988 views Apr 28, 2009

The ailing American automaker is not likely to be able to stave off Honda's ascent

The ailing American automaker is not likely to be able to stave off Honda's ascent

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Honda has made some very tough decisions over the past 12 months to reduce costs, including canceling development of its V10-powered NSX successor and pulling out altogether from the 2009 F1 season, but the moves deserve commendation as they have helped the carmaker remain profitable at a time when vehicle sales are reaching 20 to 30 year lows. While many rivals, including industry juggernaut Toyota, are posting or expecting multi-billion dollar losses, Honda has booked a profit of $1.42 billion, though this is still down 77% from the previous year.

The fourth quarter of the fiscal year ending March 31st 2009 took its toll, with Honda losing almost $1.9 billion during this time. However, despite the grim outlook, Honda expects to stay in the black for the current year, defying forecasts it could plunge to its first ever annual loss since its founding back in 1948.

The U.S. was one of the worst affected markets for Honda, with sales in March alone dipping 36% to just over 88,000 vehicles. This compares with an annual decline in Honda’s global sales of about 17% - the first decline in almost nine years.

Still, Honda stands to bounce back faster than many of its rivals due to a product range that centers on compact cars and hybrids, a lineup that is more attune to current consumer trends across the globe. Some important models include the compact Civic and Fit (Jazz), as well as the new Insight Hybrid.



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Comment (1)

  1. ma_r3vmixman avatar r3vmixman Posted: 4/28/2009 1:23pm PDT

    I have been waiting to hear this for quite some time now since the withdrawal from F1 and NSX was canceled. Take a lesson manufacturers, this is what a disciplined company looks like.
     
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