Japanese automaker Honda Motor on Wednesday forecast a 68% decline in annual operating profit to a 10-year low with worldwide demand for cars expected to slide due to the coronavirus crisis.
The country’s No. 3 automaker expects profit to decline to 200 billion yen ($1.89 billion) in the year to end-March 2021, its weakest since the 2010/11 year, and undershooting experts estimates.
Honda is getting ready for a 6% decline in annual vehicle sales following a 40% decline in the June quarter, which caused a 113.7 billion yen operating loss.
Global automakers are taking a big hit from the coronavirus crisis, which led vehicle factories shutdowns this year and has kept consumers out of car dealerships.
The automaker expects to sell 4.5 million vehicles in 2020, against 4.79 million last year. It predicts a 16% sales drop in North America, a major market for the automaker.
“If the current situation continues as is, we think the situation will not get worse (than we saw earlier this year), but it will take time for demand to recover to pre-pandemic levels,” Executive Vice President Seiji Kuraishi informed a livestreamed briefing.
Regardless of weaker sales in North America, Honda expects annual sales in Asia to rise by 8%.
China, one of Honda’s biggest markets, has become a rare bright spot for some other global automakers, as demand in the country has been recovering faster than in other countries.
Honda posted its worst operating loss since the March 2009 quarter.
Despite its dire outlook, Honda is weathering the coronavirus crisis better than rivals Nissan Motor, Mitsubishi Motor, and Mazda Motor.
