Honda made cautionary noises when announcing its quarterly numbers today, taking its annual profit forecast for the year down a notch to 370 billion yen ($4.1 billion). Three months ago, Honda already had cut its profit forecast for the fiscal year to March to 375 billion yen ($4.7 billion) from its earlier estimate of 470 billion yen ($5.9 billion). $1.8 billion evaporated on the forecast, mostly due to continuing sales troubles in China.
In China, Honda sold 604,000 vehicles in 2012, way below its initial goal of 750,000. The pace of recovery in China is slower than Honda had expected, Executive Vice President Tetsuo Iwamura told Reuters.
Analysts had expected a cheerier outlook, based on the fact that the yen has finally reversed its trend and is going down against major currencies. This turns overseas profits into more yen, and it helps exports.
Honda’s announcement throws a shadow over the financials of Toyota (Tuesday) and Nissan (Friday). Especially Nissan is very dependent on China. Nissan’s December sales were down 24 percent in China, Honda lost 19.2 percent , those of Toyota were down 15.9 percent.
The fiscal year of Japanese carmakers ends on March 31, 2013.