Honda Cuts 2021 Net Profit Outlook, Car Sales Target

Honda Motor Co. on Friday cut its net profit outlook for the current business year by 17.2 percent to 555 billion yen ($4.9 billion) as a shortage of parts prompted a sharp cut in its auto sales target and surging raw material costs weigh on the bottom line, Noriyuki Suzuki reported for Kyodo News.

Photo Insert: Honda has been forced to curb production to cope with a shortage of car parts, including semiconductors.

Honda's revised forecast from 670 billion yen represents a 15.6 percent year-on-year fall in net profit for the fiscal year ending March 2022. The carmaker also slashed its operating profit projection to 660 billion yen from its earlier forecast of 780 billion yen.

Sales, meanwhile, are now seen at 14.60 trillion yen, down from its earlier estimate of 15.45 trillion yen. The latest sales outlook still represents a 10.9 percent increase from the previous fiscal year.

Honda lowered its annual sales target for cars further by 650,000 to 4.2 million units for fiscal 2021.

The figure is lower than the 4.55 million units sold in fiscal 2020. Honda had initially planned to sell 5 million units but cut the outlook by 150,000 units to 4.85 million in August when the automaker released its first-quarter results.

Like other automakers, Honda has been forced to curb production to cope with a shortage of car parts, including semiconductors, after surging COVID-19 cases caused many factories to shut down in Southeast Asia.

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