Dispute with China leads Honda to lower profit expectations

Industry

Dispute with China leads Honda to lower profit expectations

Honda Motor, Japan’s third-largest carmaker, cut its full-year profit forecast after Chinese consumers shunned Japanese brands amid a territorial dispute between Asia’s two biggest economies.

Net income will probably reach 375 billion yen ($4.7 billion) in the year ending March, 20 percent lower than its forecast in July, the Tokyo-based maker of the Accord sedan said in a statement yesterday. Honda, the first major Japanese automaker to report this earnings season, also lowered its projections for operating profit and revenue.

The company cut its full-year China sales estimate 17 percent after the Japanese government’s purchase of a group of islands claimed by both countries triggered violent demonstrations. The aversion toward Japanese brands has turned into an opportunity for Germany’s Volkswagen AG and Korea’s Hyundai Motor to pick up market share in the world’s largest auto market.

Bloomberg