INTERNATIONAL - Honda Motor Co slashed its annual profit and global sales outlook to a four-year low, citing a firmer yen and bleak business in both India and its main market of North America, even as it unveiled plans to buy back $915 million shares.
The dour outlook comes at a time when Honda is struggling to shore up its automobile operations, with its profitability down more than half in the past two years due to a series of quality-related issues constraining its financial firepower to invest in new vehicle technologies.
Japan’s third-largest automaker now expects an operating income of 690 billion yen for the year to March, lowest since the year-ended March 2016, from 770 billion yen previously.
It sees the yen averaging 107 versus the dollar over the period, from a previous assumption of 110 yen. A stronger currency eats into profits because exports become more expensive and the value of overseas earnings decreases.
Honda said it had also been hit by an almost 20 percent slide in motorcycle sales over the six months to September in India. The world’s No.4 auto market has gone into a tailspin this year amid tight liquidity, high taxes and a weak rural economy.