Thanks to growing sales in the North American market, Honda Motor Co. set new record highs both in consolidated sales and profits in fiscal 1998, despite dwindling sales at home, Honda officials said Friday.
Japan's No. 3 automaker registered a consolidated net profit of 305.05 billion yen in fiscal 1998, which ended in March, up 17 percent over the previous year.
Consolidated pretax profit grew 17.4 percent to 520.51 billion yen on group sales of 6.23 trillion yen, an increase of 3.9 percent.
Honda attributed the favorable performance to strong sales of automobiles in North America, especially the CR-V sports-utility vehicle, as well as to the yen's depreciation and cost-cutting efforts.
The results reflect Honda's increasing dependence on the North American market to compensate falling sales in Japan.
Hit by the domestic economic slump, domestic sales dropped 9 percent to 1.56 trillion yen, while overseas sales surged 9 percent to 4.67 trillion yen, Honda said.
North America accounted for 52.3 percent of total operating profits, with 37.6 percent generated in Japan, according to Honda.
Domestic operating profit stands at 206.2 billion yen, even when profit from exports to overseas markets, including North America, is counted.
Speaking at a news conference, Honda Managing Director Satoshi Aoki declined to comment about business conditions at home minus export sales, saying Honda does not disclose that figure in announcing earning results.
Honda is also increasingly shifting production overseas. For fiscal 1999 that ends March 2000, overseas production is projected to hit 1.27 million units and exceed domestic production, which is projected at 1.24 million units, for the first time ever.
Honda announced plans earlier this month to open a third North American auto manufacturing plant in 2002, at Lincoln, Alabama. The plant will help boost annual production capacity in the region from 960,000 to 1.13 million units by around 2003.