Honda Motor Co. said Tuesday it expects group operating profit to dive 94.7 percent from fiscal 2008 to a mere ¥10 billion for the current business year unless auto sales recover from the damage caused by the global economic crisis.
For fiscal 2008, which ended in March, Honda said group net profit sank 77.2 percent from a year earlier to ¥137.01 billion, but fared better than its earlier projected net profit of ¥80 billion.
Operating profit also plunged, dropping 80.1 percent to ¥189.64 billion on sales of ¥10.01 trillion, down 16.6 percent for its first year-on-year drop in nine years.
But among Japan's top three automakers, Honda is likely to stand alone in staying in the black, as Toyota Motor Corp. and Nissan Motor Co. expect to report huge losses next month for fiscal 2008.
In addition to the stronger yen, which dented overseas profits, Honda was hit hard as vehicle sales across all its overseas markets dropped 10.5 percent from the previous year to 2,961,000 units.
Domestic vehicle sales slid 9.6 percent to 556,000 units.
In total, sales in Japan and abroad shrank 10.4 percent to 3,517,000 units.
Looking ahead, Honda is likely to fall into the red with a group operating loss of ¥110 billion for the April-September half.
For the full year through next March, the automaker projects group net profit will fall 70.8 percent to ¥40 billion on sales of ¥8.37 trillion, down 16.4 percent.
Japan's second-largest automaker also projected car sales would slip 8.7 percent from a year earlier to 3,210,000 units for fiscal 2009. Its sales outlook for motorcycles stood at 8,595,000 units, down 15.0 percent.