Honda Motor forecast a 16 percent drop in operating earnings for the current financial year as the automaker sees greater automobile sales being balanced out by a stronger yen and research and development expenses.
Honda stated it anticipates an operating revenue of 705 billion yen ($6.34 billion) in the year to March, that’s less than 840.7 billion yen published in the year just ended, and less than an average quote of 850.8 billion as per 23 analysts polled by Thomson Reuters I/B/E/ S.
It observes a 14 percent slide in net profit to 530.0 billion yen in 2017/18.
Honda’s forecasts are based on a thought that the yen will average 105 yen to the United States dollar through March, more powerful than both its 108 yen rate in the year just ended.
Executive Vice President Seiji Kuraishi considered that Honda’s expected currency hit of 95 billion yen was based on a “conservative” yen forecast, adding that growing expenses to develop next-generation vehicles would also affect revenues.
“Our expenses are rising to develop new innovations which will be required in the future, like automated driving functions and electric vehicles,” he informed reporters.
Honda’s continuous research and development of self-driving vehicles, lower-emissions powertrains and brand-new mobility services comes as automakers in Japan look for ways to add more worth to their vehicles beyond the quality and reliability which sustained their international development over the last decades.