Honda Sees Revival in U.S. Sales - Analyst Blog

Honda Motor Co. ( HMC ) is trying to revive its sales in the U.S. by offering improved line-ups, including revamped Civic and redesigned CR-V and Accord. It also plans to build its new Acura NSX supercar in Ohio that is expected to push sales in the U.S. The Japanese automaker considers the new products to boost sales in its biggest market by more than 20% in 2012.

Last year, both Honda and its compatriot, Toyota Motor Corp. ( TM ), lost sales to fast growing Korean automakers, Hyundai Motor Co. ( HYMLF ) and its sister concern Kia Motors due to their fuel-efficient but inexpensive line-ups. Further, General Motors Co. ( GM ) and Ford Motor Co. ( F ) also came up with some revamped models with better exterior and interior styling that took away the market from the Japanese automakers.

In 2011, Honda's sales dipped 6.8% to 1.15 million vehicles due to production disruptions caused by parts supply shortages and plant shutdowns on the back of the twin disasters in Japan and severe floods in Thailand.

Sales of Honda's CR-V small sport-utility vehicle grew 7.2% last year. However, sales of midsize Accord sedan ebbed 17% to 235,625 vehicles and that of smaller Civic fell 15% to 221,235 vehicles in the year.

In the second quarter of its fiscal year ended September 30, 2011, the Zacks #3 Rank (Hold) company saw 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 disaster in Japan and unfavorable currency translation effects. At an unchanged exchange rate, Honda's revenues would have decreased 12%.

Consolidated operating profit slashed 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.

The automaker could not provide any guidance for the fiscal year ending March 31, 2012 as it needed to evaluate the extent of the damage resulting from the severe floods in Thailand, which caused damage to inventories, and machinery and equipment of the company's operations in the country.

FORD MOTOR CO ( F ): Free Stock Analysis Report

GENERAL MOTORS ( GM ): Free Stock Analysis Report

HONDA MOTOR ( HMC ): Free Stock Analysis Report

TOYOTA MOTOR CP ( TM ): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos