Honda Motor Co. (HMC) has resumed the production of motorcycles and power products at its subsidiary plant in Thailand, which was closed due to the severe floods in the country recently. However, the company’s automobile factory in Thailand will remain closed due to the inundation.
Production of motorcycles was suspended since October 11 due to disruptions in parts supply at its plant operated by Honda Automobile (Thailand) Co., Ltd.
Honda continues to limit production at its six automobile plants in the U.S. and Canada due to the shortage of parts that are sourced from Thailand. However, the automaker revealed that some of its plants in the U.S. and Canada will produce at rates exceeding 50%. The company expects production to return to normal from December 1.
Honda stated that production of its revamped Honda CR-V is scheduled to begin on November 29, despite parts shortages from Thailand. The company anticipates to begin selling the 2012 CR-V in mid-December.
Japanese automakers had already been suffering from parts shortages caused by the earthquake and tsunami in northeastern Japan on March 11. Honda restrained the assembly of vehicles in the spring and summer due to the same reason. The launch of CR-V was delayed from autumn until December due to disruptions in parts supply caused by the earthquake.
Honda, a Zacks #3 Rank company, reported a 55% decline in profit to ¥60.4 billion ($788 million) or ¥33.53 (44 cents) per share in the second quarter of its fiscal 2012 from ¥135.9 billion or ¥75.24 per share in the year-ago period.
Consolidated net sales and other operating revenues in the quarter dipped 16% to ¥1.89 trillion ($24.60 billion) due to the negative impact of the catastrophe in Japan and unfavorable currency translation effects. At an unchanged exchange rate, Honda’s revenues would have decreased 12%.
Consolidated operating profit plummeted 68% to ¥52.51 billion ($685 million) from ¥163.47 billion ($782.07 million). The decrease was attributable to lower sales volume, unfavorable model mix, increase in fixed costs, higher raw material cost and unfavorable foreign currency translation effect.
Honda could not provide any guidance for the fiscal year ended March 31, 2012, as it needs to evaluate the extent of the damage following the severe floods in Thailand.
The company’s archrival, Toyota Motor Corp. (TM) posted an 18.5% fall in profit to ¥80.42 billion ($1.03 billion) in the second quarter of fiscal year ended September 30, 2011 from ¥98.69 billion in the same quarter of prior fiscal year. On per share basis, profits were ¥25.65 (33 cents) versus ¥31.47 in the second quarter of fiscal 2011, missing the Zacks Consensus Estimate of 52 cents.
The continuous decline in profit was attributable to a fall in production volumes and sales volumes all over the world, especially Japan, North America and Europe due to disruptions in supply of parts caused by the twin disaster in Japan.
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