Japanese automakers Honda and Nissan announced Wednesday another set of dismal earnings but said they saw glimmers of hope for the gloom-ridden industry thanks to growing interest in fuel-efficient cars. The two companies blamed weak sales in key markets such as the United States, Japan and Europe for another tough quarter.
Honda said its net profit dived 95.6% in the April-June period from a year earlier to 7.56 billion yen (US$80 million). Revenue slid 30.2% to 2 trillion yen, weighed down by a stronger yen.
But Honda upgraded its outlook for the full year to March, forecasting a net profit of 55 billion yen, against an earlier goal of 40 billion yen. "While we cannot say yet that the North American market has recovered, sales are picking up this past month," helped by government economic stimulus measures, said Honda Vice President Koichi Kondo.
Nissan, which is axing 20,000 jobs to cope with the global economic crisis, logged a net loss of 16.53 billion yen (US$175 million) for the April-June quarter, against a year-earlier profit of 52.80 billion yen. But it managed to eke out a better-than-expected operating profit of 11.6 billion yen in the quarter.
"2009 continues to be a tough year, but we are beginning to see positive results from the measures taken under our recovery plan," said Nissan CEO Carlos Ghosn, who also heads Renault.
Nissan reiterated its forecast to end the full business year to March 170 billion yen in the red, after a 233.7 billion yen shortfall the previous year -- its first annual loss in almost a decade.
Japanese automakers, which rely heavily on overseas markets, have taken a heavy blow from the global economic downturn. Industry watchers said the outlook was brightening, but agreed that the road to recovery would be a bumpy one.
"The Japanese auto industry is expected to pick up later this year thanks to government incentives, which are boosting sales of environmentally friendly cars, notably hybrids," said Okasan Securities auto analyst Yasuaki Iwamoto. "But tough times still lie ahead. Automakers have to maintain their momentum after the impact of government incentives end."
Honda is seeking to accelerate the launch of its hybrid vehicles to ride a wave of interest in fuel-efficient cars, helped by government tax incentives. Earlier this year the company rolled out a revamped model of its flagship fuel-sipping Insight, which was the best-selling hybrid in April in Japan before being overtaken by rival Toyota's remodeled Prius.
Nissan, which was slower than rivals Toyota and Honda to embrace fuel-efficient gas-electric hybrids, aims to take a lead in zero-emission cars and will unveil its first model to the public in Japan on Aug. 2.
Analysts expect Toyota Motor, the world's largest automaker, to report a quarterly loss next week, having warned in May that it expected to finish the current business year with its bottom line 550 billion yen in the red.
Copyright Agence France-Presse, 2009