| TOKYO, April 27
TOKYO, April 27 Honda Motor Co is set
to end a five-quarter drop in operating profits and forecast a
triple-digit surge in annual earnings after a 2011 hammered by
the yen's record strength, natural disasters and a crisis of
reputation in its key U.S. market.
On top of being the last Japanese car maker to get its
supply chain in order after a massive earthquake and tsunami in
March last year, Honda was alone in having one of its factories
inundated by Thailand's floods in October, only resuming work
there late last month.
Japan's No.3 automaker is expected to report on Friday a
more than doubling in operating profit for the January-March
fourth quarter, lagging an earlier recovery from both disasters
by rivals Toyota Motor Corp and Nissan Motor Co
But despite a year that executives characterised as the
toughest the 64-year-old company had faced, Honda is likely to
have remained in the black thanks to its dominant and profitable
motorcycle business and a globally spread-out manufacturing
footprint that helped it cope better with the strong yen.
In the business year that ended last month, Honda exported
just 253,000 cars from Japan, or less than 30 percent of its
domestic output. Toyota shipped 1.67 million vehicles, or 54
percent of the cars it built in Japan and Nissan exported about
741,400, or 62 percent.
Helping its turnaround, Honda 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.
Honda will also make minor changes later this year to the
one-year-old Civic after the latest version of the perennially
popular model got 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, including by doubling as the 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.
"We need to move further away from a U.S.-centred growth,"
he said at the Beijing auto show.
Ito has said he expects record car sales this business year
of at least 4 million vehicles.
Honda will report its fourth-quarter results and announce
2012/13 forecasts at 3 p.m. (0600 GMT). Toyota will report on
May 9 and Nissan on May 11.
Honda's shares have risen 3.5 percent in the past three
months, lagging gains of 14 percent by both Toyota and Nissan.