Honda profit up as U.S., Japan car sales offset Thai drop
TOKYO (Reuters) - Honda Motor Co (7267.T) said strong car sales in the United States and Japan offset a slowdown in Thailand in the three months to September, helping the Japanese carmaker post a 46 percent growth in quarterly net profit.
Honda reported stronger-than-expected demand for its remodeled Fit subcompact that went on sale in Japan in September, a key model in its ambitious plans to boost global sales.
The company aims to boost worldwide car sales by around 1.5 times to 6 million vehicles by end-March 2017.
Strong sales in the United States and Japan helped Honda post a quarterly net profit 120.4 billion yen ($1.2 billion), compared with 82.2 billion yen a year ago, though that was lower than the average estimate of 134.9 billion yen in a Thomson Reuters I/B/E/S poll of six analysts.
Honda car sales in Japan rose 2.6 percent from a year ago in July-September to around 179,740 vehicles, helped by a jump in September after the Fit went on sale.
The higher-than-expected demand caught parts suppliers by surprise, and the company has a backorder of more than 60,000 Fit vehicles, Executive Vice President Tetsuo Iwamura said.
Japan is the first country where the redesigned Fit went on sale. Honda will start operating a new plant in Mexico in spring 2014 to manufacture the Fit, which will go on sale in the United States around the same time.
Honda, the fifth biggest carmaker in the United States, sold 413,434 vehicles in the U.S. market in July-September, up 13.1 percent from a year ago, helped by strong sales of the Accord and the Civic.
Conversely, business in Southeast Asia's biggest auto market, Thailand, has slowed after an incentive program for first car buyers ended.
Even though Honda sold the most number of passenger cars in Thailand in January-September, surpassing Toyota, its July-September sales fell 21.8 percent from a year ago to 45,480 vehicles as customers cancelled vehicle orders.
That accounted for some 4 percent of Honda's global sales of 1.047 million vehicles in July-September.
The rate of drop was smaller than rival Toyota's 30.4 percent fall and Nissan's 25.4 percent decline.
"We expect Thailand to continue growing steadily, but the growth rate will drop," Iwamura said.
Globally, Honda kept its car sales forecast for the year ending March 2014 at 4.43 million vehicles.
Honda also said that it would sell its electronic parts subsidiary to Japan's Nidec Corp (6594.T), a maker of precision motors. It declined to give the price of the deal, though the Nikkei business daily reported earlier that it would be sold for about $500 million.
Honda is the first of Japan's big three automakers to announce quarterly results. Nissan Motor Co (7201.T), Japan's second-biggest carmaker, said on Wednesday that it is moving its earnings date to November 1 from November 5, while market leader Toyota Motor Corp (7203.T) will announce on November 6.
($1 = 98.0900 Japanese yen)
(Reporting by Yoko Kubota; Jeremy Laurence)
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