CORRECTED-UPDATE 2-Honda sees bumper year as it leaves disasters behind
By Chang-Ran Kim
TOKYO, April 27 (Reuters) - Honda Motor Co forecast a near-tripling of operating profit in the year ahead on surging Asian sales and a recovery in the United States, marking an emphatic rebound from a 2011 hammered by the yen's record strength and natural disasters.
Japan's No.3 automaker is expected to ride faster-than-expected growth in demand in the United States, its biggest and most profitable market, where sales of the remodelled CR-V crossover have jumped by more than a quarter so far this year.
For the year to next March, Honda forecast an operating profit of 620 billion yen ($7.7 billion), up from 231.36 yen in the financial year just ended. The forecast was slightly behind analysts' consensus for 645 billion yen, but bullish nonetheless for a company noted for its conservative earnings guidance.
"The North American market is slowly recovering, while we're entering new segments in Asia," said Executive Vice President Tetsuo Iwamura. "We're expecting to grow faster than the overall market."
Iwamura added that the overall U.S. market would likely grow to 14.3 million vehicles this year, up from 13.5 million seen at the end of 2011, and Honda aimed to recover a market share of more than 10 percent as soon possible.
Honda, which has lagged a recovery from the effects of disasters in Japan and Thailand by rivals Toyota Motor Corp and Nissan Motor Co, more than doubled its fiscal fourth-quarter operating profit, ending five straight quarters of decline.
January-March operating profit jumped to 111.98 billion yen ($1.4 billion), but slightly lagged an average estimate of 123.2 billion yen in a survey of 23 analysts by Thomson Reuters I/B/E/S. Net profit, which includes earnings made in China, rose 60.7 percent to 71.59 billion yen.
Honda was the last Japanese car maker to get its supply chain in order after a massive earthquake and tsunami in March 2011, and only re-started work at its Thai car plant at the end of last month following October's floods.
ROBUST SALES FORECASTS
Giving robust sales guidance, Honda forecast its global car sales would jump 38.4 percent to 4.3 million vehicles and its motorcycle sales would increase 10.2 percent to 16.6 million in 2012/13.
It sees sales in North America rising 31.5 percent to 1.74 million vehicles, sales in Japan climbing 20.7 percent to 710,000 and the rest of Asia by 56.5 percent to 1.31 million.
Honda will make minor changes later this year to the year-old Civic after the latest version of the perennially popular model was panned by critics, raising deeper concerns over whether the automaker was slipping in a battlefield made tougher by products from Hyundai Motor Co and resurgent U.S. rivals Ford Motor Co and General Motors Co .
Honda CEO Takanobu Ito has conceded that the company he took over in mid-2009 may have let down its guard during the previous decade of rapid expansion, while pulling back on vehicle development too much after the global financial crisis.
Honda is under intense scrutiny to redeem itself this fall with the next version of the Accord, which will be the first major model to carry a new generation of engines and transmissions that it hopes will make its future cars the most fuel-efficient in their categories.
Ito has put in place structural changes to respond more nimbly to competition. He is doubling as head of car operations for now. He also said this week that Honda would step up its game in China, where its market share has slipped in the past four years, announcing plans to boost output capacity and beef up its local R&D function.
Honda's shares have risen 5.5 percent in the past three months, lagging gains of around 14 percent by both Toyota and Nissan.