Honda profit to drop 63.5 pct

June 14, 2011 - 1:40 AM

TOKYO (AP) — Honda's profit for the fiscal year through March 2012 is expected to plunge 63.5 percent as vehicles sales slipped amid a parts shortage caused by the quake and tsunami in northeastern Japan.

Honda Motor Co. gave the forecast Tuesday, more than a month later than usual. Like other Japanese automakers, the maker of the Odyssey minivan and the Fit compact needed more time to assess the aftermath of the March 11 disaster.

But Honda said vehicle production in Japan is expected to be back at nearly normal levels by later this month, and production in regions outside of Japan is expected to be back up to pre-disaster levels in August or September.

Honda said it will try to make up for lost time and deliver more vehicles, but it is expecting its global vehicle sales for the fiscal year through March 2012 to drop 6 percent on year to 3.3 million vehicles. Honda had sold 3.51 million vehicles worldwide the previous fiscal year.

Honda is projecting a profit of 195 billion yen ($2.4 billion) for the current fiscal year, down sharply from 534 billion yen recorded the previous fiscal year.

The Tokyo-based automaker put the blame on the disaster, citing the decline in sales and the cost of fixing damaged property and equipment.

It also said higher raw material costs and research expenses related to future products, especially environmental technology, also hurt its bottom line.

Honda is now expecting sales to slip 7.1 percent on year to 8.3 trillion yen ($104 billion) for the current fiscal year, it said in a statement.

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Yuri Kageyama can be reached at http://twitter.com/yurikageyama