Honda pins recovery hopes on green cars

Leo Lewis, Asia Business Correspondent
Honda today raised its full-year profit forecast on hopes “green” stimulus efforts around the world will push consumers to offload old vehicles in favour of nimbler, more efficient models.
Honda said that it now expects Y55 billion in profits for the year ending in March next year, where its previous forecast had been for Y40 billion.
The raising of full-year forecasts offered relief from otherwise grim quarterly results from Japan’s second-biggest automaker.
Net profits for the April to June period were some 95.6 per cent lower than the same time last year and, at Y7.56 billion put the group only barely in the black.

Both Honda and Toyota appear to be benefiting strongly from government stimulus measures in Japan, the US, Germany and China, where schemes have been set up that offer, via tax breaks and cash lures, strong incentives for people to trade-in their cars for a less fuel-consumptive alternative.
That has strongly favoured hybrid cars of the sort produced in the largest volumes by the two largest Japanese manufacturers.
The schemes are not, however, expected to provide the panacea for the Japanese car industry’s many ills, which include a domestic market that is shrinking in line with the country’s wider demographic decline.
Equally challenging, say analysts, will be Japan’s push into the emerging markets of Asia, where local players are aggressively growing market share and have a substantial foothold.
Even in territories where Japanese makers have historically thrived, such as Europe, the likes of Toyota and Honda are likely to face increasingly fierce competition from Chinese manufacturers.
Earlier this week, Geely Automobile, in China, said that it was on the brink of releasing its first vehicle specifically designed for the European market.