Pandemic Muscles Into Honda and Mazda's 2019 Profits

Steph Willems
by Steph Willems
pandemic muscles into honda and mazdas 2019 profits

The ongoing coronavirus pandemic only reared its spiky head at the tail end of the fiscal year, but the disruption to automakers was strongly felt. In a new vehicle market that was largely cooling off, the impact of fewer sales and idled plants was immediate.

That said, the virus didn’t spread the damage evenly.

On Tuesday, Honda reported a $5.9 billion operating profit for the just-ended fiscal year — a drop of 13 percent over the previous year. Analysts were expecting a slightly better result.

Those same people were left guessing as to the automaker’s current fiscal performance, as Honda didn’t provide an outlook for the current year. Suffice it to say it doesn’t take a psychic to see a dismal year ahead. Honda’s North American plants only came online Monday after shutting down in late March, and weakened economies, existing lockdown measures, and continuing supply chain disruption stands to lower production output and sales across the globe in the months ahead.

Now, Honda’s a major automaker with assembly operations galore and stratospheric annual sales. What about a smaller automaker? Take Mazda, which on Tuesday issued a profit warning to investors. The automaker now expects a 81-percent drop in 2019 fiscal year net income — a significantly worse scenario than the previously predicted 32-percent drop.

The strain on Mazda’s balance sheet is expected to lower its net profit to $112 million; just barely in the black. Operating profit is now predicted to drop 47 percent, a far great amount than the previous 27-percent predicted drop. On top of that, sales projections for 2020 saw another haircut; the automaker now envisions the sale of just over 1.4 million vehicles, down from 1.5 million in an earlier forecast.

It was reported last week that Mazda is seeking $3 billion in financing to tide it through the health crisis.

[Source: Automotive News, Reuters] [Image: Honda]

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  • Deanst Deanst on May 12, 2020

    It’s heard to believe Mazda was once competing with Honda for the best selling car in Canada. The new 3 is nowhere to be found.

  • Brett Woods 2023 Corvette base model.
  • Paul Taka Hi, where can I find 1982 Honda prelude junkyards in 50 states
  • Poltergeist Make sure you order the optional Dungdai fire suppression system.
  • Prabirmehta I charge my EV at home 100% of the time. The EV is used for in-town driving and the gas guzzling SUV is used for out of town trips. This results in a huge cost saving and rare trips to the gas station.
  • Conundrum Three cylinder Ford Escapes, Chevy whatever it is that competes, and now the Rogue. Great, ain't it? Toyota'll be next with a de-tuned GR Corolla/Yaris powerplant. It's your life getting better and better, yes indeed. A piston costs money, you know.The Rogue and Altima used to have the zero graviy foam front seats. Comfy, but the new Rogue dumps that advance. Costs money. And that color-co-ordinated gray interior, my, ain't it luvverly? Ten years after they perfected it in the first Versa to appeal to the terminally depressed, it graduates to the Rogue.There's nothing decent to buy on the market for normal money. Not a damn thing interests me at all.