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Honda Profits Nosedive 90 Percent


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So you've heard of huge profit falloffs in the twentieth, the thirtieth, even the fourtieth percentiles...how does a 90 percent drop in profit strike you? Kind of puts fear into the heart, as it has for Honda execs who have slash-and-burned their entire yearly forecasts based on a 90 percent drop in profit for the three-month period beginning last September 31 (the third quarter of Japan's fiscal year).

To be sure, this is only a quarterly result, and not representative of the entire year. 2008 was a whole lot nicer to Honda than this horrendous third quarter result alone. Still, weathering three months of business that bad can cause serious hemorrhaging to even the strongest companies, and it's a scary harbinger for everybody's 2009.

Japanese automakers face a one-two punch; a nasty sales downturn in the U.S. compounded by a sudden surge in the yen, which has risen to its highest levels against the U.S. dollar in 13 years. This is driving the cost of doing business sky-high for the Japanese.

Both Nissan and Toyota are expected to announce similarly grim news in the days ahead.

[source: Detroit News]

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Comments (4)
  1. "So?"

    How much did they make for the year compared to other automakers?
     
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  2. "IT'S WORLD-WIDE"

    This just goes to show that all the talking heads on TV don't know zilch about this auto downturn. "The big three are not making the right cars." "The big three make those awful full-size cars and SUVs and God, do I say it, TRUCKS!" BUNK!!! Does this sound like the talking points of the "green/left"? This uninformed message is the one being regurgitated by the myopic journalists and TV zombies. Time to educate these idiots. Detroit makes the cars Americans want, it's just not the cars the GREEN NAZIs want. I'm not driving a mini in my lifetime, bozos. Make mine a HEMI CHALLENGER!
     
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  3. "Trucks?"

    Bill: the Asians did also make more money selling V8 trucks and SUVs. Fortunately, Civics and Corollas will tide them through until the market returns -- maybe someday about two years from now.
     
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  4. "at least they had profits"

    At least Honda had profits to lose unlike GM, Ford and Chrysler. The differences is they covered all the bases. Economic downturns can be very darwinian, survival of the fittest. While Honda may be down on profits it is still profitable and has cars accross many sectors that are leaders. Bill's Hemi will return but as niche vehicles aimed at neaderthals who can't cope with a changed world. The rest of the US though will start to emulate the rest of the world and focus on economical cars that are reliable and well made. Something Honda is well known for and makes them one of the companies most likely to come out of this economic turmoil on top.
    The big downside for Honda is the lack of international partners. Over the next 2 years I think we wil start to see some interesting match ups, the Fiat - Chrsyler one is only the first of many to come.
     
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