Honda sees 63% drop in earnings

Just days after its rival, Toyota, projected it would see a huge plunge in profits as the result of the March 11 Japanese earthquake, Honda Motor Co. says it also will take a devastating hit to its bottom line, with earnings for the current fiscal year likely to plunge by 63.5%.
Honda – like Toyota – delayed its forecast for the fiscal year running through March 2012 while it assessed the impact of the earthquake and subsequent tsunami, which shut down most of its home market production for a month.
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Honda now expects to have most of its factories back up to speed sooner than initially anticipated, but several key operations, including the plants producing the critical new 2012 Civic, will be operating below capacity until autumn.
Honda anticipates the current fiscal year will see profits of 195 billion yen ($2.4 billion), down by nearly two-thirds from the 534 billion yen recorded during the fiscal year that ended last March 31.
The maker puts most of the blame on the March 11 natural disaster, which not only impacted production but also ran up billions of yen in unanticipated repairs to Honda plants and other facilities. The company was the only Japanese automaker to report an on-site fatality during the earthquake, a worker at the Tochigi technical center killed when a wall collapsed upon him.
“Honda was deeply hurt” because it operates so lean it couldn’t make up for losses suffered during the disaster, analyst Koji Endo, Tokyo’s Advanced Research Japan, told the Associated Press. “This is going to take awhile.”
Other factors that will negatively impact Honda’s projected earnings include rising raw materials costs as well as the weak U.S. dollar – though the maker’s large production base in the States helps minimize the effects of lopsided exchange rates.

(Toyota, with a larger home market production base, is being especially hard hit by the weak dollar. Click Here for more.)
But the March disaster has curtailed Honda’s production at both home and foreign-based plants, Honda predicting it will see global sales slip to 3.3 million for the fiscal year as a result – a 6% decline from the prior year’s 3.51 million. Revenues, meanwhile, are projected to dip 7.1%, to 8.3 trillion yen, or $104 billion.
Like Toyota, Honda plans to begin making up some of its lost production in the months ahead. But the timing of the disaster will make it difficult to recover completely. Ongoing product shortages have meant that Honda could not take full advantage of shifting consumer sentiments – especially in the U.S. – triggered by soaring fuel prices.
The maker was short of a number of its smaller, more energy-efficient models, including the Fit and its various hybrid-electric vehicles. It also lost momentum with the critical launch of the next-generation Civic, traditionally one of the best-selling models in the compact segment.
Toyota last week projected its fiscal year profits would fall by a third, to 280 billion yen, or $3.5 billion. Nissan has also delayed its earnings forecast but is expected to release that report prior to the company’s annual shareholders meeting on June 29.
Honda Forecasts 63% Drop in Profits

New Public Hydrogen Station Adds Convenience for FCX Clarity Customers

AMERICAN HONDA FCX In an opening ceremony, customer Jon Spallino became the first retail fuel-cell electric vehicle customer to fill at the station. (PRNewsFoto/American Honda) TORRANCE, CA UNITED STATES


TORRANCE, Calif.– Southern California’s network of hydrogen refueling stations continues to grow in Southern California with the opening today of the world’s first station supplied by an existing hydrogen pipeline. The new Shell hydrogen station, which is conveniently located in Torrance, California, next to several major freeway corridors and near the Los Angeles International Airport, taps into an existing industrial hydrogen pipeline serving a nearby refinery. The station is also outfitted with multiple fuel dispensers, which allow for the simultaneous refueling of four vehicles in less than five minutes.

In an opening ceremony, Honda FCX Clarity customer Jon Spallino became the first retail fuel-cell electric vehicle customer to fill at the station. With this new station operational, FCX Clarity customers will have access to seven hydrogen refueling stations across Southern California. The FCX Clarity is available on a limited retail basis in Southern California with more than two dozen currently on the road and in the hands of individual customers.

“This new Torrance hydrogen station will give FCX Clarity customers another option for quick, convenient fueling,” said Elmer Hardy, senior manager, Alternative Fuel Vehicle Sales & Marketing at American Honda Motor Co., Inc. “This is a positive step for our FCX Clarity customers and the industry as we continue to put vehicles on the road and demonstrate the real-world capabilities of Honda fuel-cell electric vehicle technology.”

Propelled by an electric motor that runs on electricity generated in an on-board fuel cell, the FCX Clarity delivers quiet, clean power with a small amount of water as its only emissions. The FCX Clarity’s fuel efficiency is three times that of a comparably sized modern gasoline-powered automobile, and two times that of a gasoline-powered hybrid vehicle. With a 240-mile EPA-certified driving range and 5 minute refueling time, the zero-emissions FCX Clarity provides customers with a very convenient and anxiety-free driving experience.

The compact and powerful Honda V Flow Fuel Cell Stack allows for unprecedented interior spaciousness and a futuristically stylish, low-slung design previously unattainable in fuel-cell electric vehicles and marks the significant progress that Honda continues to make in advancing the real-world performance and appeal of a fuel-cell electric car.

Honda Fuel-Cell Electric Vehicle Firsts:

The first generation Honda FCX became the first EPA- and CARB-certified fuel-cell electric vehicle in July 2002. The FCX was also the world’s first production fuel-cell electric vehicle, introduced to the U.S. and Japan in October 2002. Additional highlights include:

Honda FCX was the first fuel-cell electric vehicle to start and operate in sub-freezing temperatures (2003).
Honda FCX was the first fuel-cell electric vehicle placed in the hands of an individual retail customer (July 2005).
Honda was the first manufacturer of a dedicated fuel-cell electric vehicle on a production line specifically for hydrogen-powered fuel-cell electric vehicles (2008).
Honda was the first manufacturer to create a fuel-cell electric vehicle dealer network (2008).
FCX Clarity was the first fuel-cell electric vehicle to pace a U.S. Indy Car Race (2011).

Auto industry insists Thai jobs safe after Japan crisis

Employers in the automobile industry say they will not lay off workers and are trying to ensure they survive the repercussions from the situation in Japan. Yongyuth Mentaphao, president of the Federation of Automotive Labour Unions, said the disaster has affected the auto industry in Thailand, a major base for car parts production, as certain parts have to be imported from Japan. Plants in Japan could not produce car parts because of limitations imposed on electricity usage in Japan after last month's earthquake and tsunami and the continuing nuclear crisis. This has affected the assembly line and workers in the car industry in Thailand, Mr Yongyuth said. There are about 500,000 workers in the Thai auto industry. He said these employees are not being offered overtime, but there are no plans to lay them off. He believed Japan will recover from the situation soon, and when the situation picks up, production capacity is expected to increase two to three-fold because a lot of orders have been placed. The orders have not been cancelled despite the crisis, Mr Yongyuth said. Chalee Loysoong, president of the Confederation of Thai Electrical Appliance, Electronics, Automobile and Metal Workers, said the confederation has asked employers in the car parts industry not to dismiss workers. Once the situation returns to normal, the industry will be hit by staff shortages and it will be difficult to find skilled and experienced workers, he said. Amporn Nitisiri, director-general of the Labour Protection and Welfare Department, said about 300 factories in the car parts and car assembly industry and more than 100,000 workers have felt the effects of the crisis in Japan. Some have been laid off temporarily and received only 75% of their compensation payments, Ms Amporn said.

Japan car makers's situation after 10 days earthquake

Japanese auto makers, led by Toyota Motor Co, are struggling to restart production amid a shortage of parts and workers, and must now worry about a profit-sapping surge in the yen after Japan's biggest earthquake. Articles Yen rise may cause bigger damage to Toyota profit than quake Toyota, the world's No.1 automaker, said on Wednesday it will keep its 12 local assembly plants shut for a further week at least. The plants have been closed since Friday's 9.0 magnitude earthquake unleashed a tsunami which killed at least 10,000 and damaged a nuclear plant north of Tokyo. Toyota's largest domestic rival, Nissan Motor , said it would restart two plants on Thursday and Friday, but production beyond that remained uncertain. Other plants would take longer to get back on line. No.3 Honda Motor has also idled plants and on Wednesday reiterated its plans to suspend all production in Japan until at least Sunday. Analysts said if production starts within a couple of week, excess capacity resulting from the dip in global car sales after the financial crisis of 2008 means the automakers may be able to make up for lost output. But with the Japanese currency nearing a record high, the profit margin on their Japan-made cars will shrink. "The direction of the Japanese yen over the next three to six months as a result of this catastrophe will also affect the profitability if Japanese automakers," Fitch Ratings said in a report. The dollar has fallen 3 percent against the yen since the disaster and is now close to its all-time low. The dollar traded around 80.8 yen on Wednesday, just a yen away from 79.75 in 1995. Traders and investors are watching for signs of repatriation by Japanese investors and companies because after the Kobe earthquake in 1995, the yen surged to an all-time high against the dollar based on similar flows. So far though most traders have not seen repatriation taking place. PLANTS REMAIN IDLE Toyota still builds 38 percent of its vehicles in Japan, making it the most exposed to the crisis and the resulting rise in the value of the yen. It ships more than half of its domestic output to overseas markets. Nissan produces 24 percent of output in Japan while the figure for Honda is just 22 percent. Toyota said on Wednesday that it would restart some parts production on Thursday at seven small plants near its home base in Toyota city. The same plants from Monday will also begin shipping car components for assembly overseas. Yet, until it can restart its main factories lost production, which over the past three days has risen to about 40,000 vehicles will mount. Elsewhere, it has cut over-time production at plants in Thailand and North America while it assesses the impact on supplies. Amid a general rebound in stocks Wednesday, Toyota closed up 9 percent, with Nissan up 6 percent and Honda 3.9 percent higher. Goldman has estimated the profit impact of stopping production for one day would be about 6 billion yen ($74 million) for Toyota and 2 billion yen for Honda and Nissan. Koji Endo, managing director of Advanced Research Japan in Tokyo, said plants were likely to start resuming production next week and should be back up to full capacity by the end of the month. "Even if those companies lose say 100,00, 150,000 units until the end of March I think they can recapture that lost opportunity from April," he said Auto production in Japan is concentrated in central of and southern regions, with few big plants in the worst affected areas. Plant shutdowns could start affecting global automakers and parts suppliers within two weeks due to the integration of the industry. Hyundai Motors in neighboring South Korea said it doesn't expect the Japanese auto industry's woe to affect it. "We do not see a major impact from Japan's earthquake because we have secured an inventory of one to two months," a spokeswoman said. Those Japanese parts makers that do ship products to Hyundai were not directly affected by the earthquake, she added Hyundai and affiliate Kia Motors will be less affected by parts supply disruption from Japan than their U.S. and European peers because they source most of their components from South Korean firms, Mo Se-jun, an analyst Hana Daewoo Securities, said. "It remains to be seen whether South Korean carmakers will benefit from the disaster as Japanese carmakers have a two-month car inventory," Mo said.