Honda Motor Co. slashes forecast profit by 62 percent

Honda Motor Co. have been forced to slash their sales profit forecast by an astonishing 62 percent, a direct result of a 13-year high for the yen against the dollar. Another factor is the slump in Honda cars sales in not only North America but also Europe as well.

Honda, Japan’s second largest automaker expects net income to be 185 billion yen ($2.08 billion), this is for the year ending March 31. Honda’s earlier forecast had been 485 billion yen. The operating profit is now expected to be 180 billion yen, compared to the previous forecast of 550 billion yen.

It is now thought that Honda will report a half-year operating loss, this is the first time in 11 years, and shows how much the global recession is now taking hold and affecting car sales. The yen has gained 26 percent against the dollar and 30 percent against the euro; this has had a huge effect on Honda’s profits.

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