Strong yen, raw-materials costs hurt Japanese automakers profit.
The
Wall Street Journal (4/26, B5, Takahashi) reported, "The strong yen and rising raw-materials costs took their toll on Honda Motor Co. and Mitsubishi Motors Corp. in the fiscal fourth quarter, and while Mazda Motor Corp. put in a strong performance, all three Japanese automakers issued dismal profit guidance for the coming year." Honda's 86 percent slide in net profit for the quarter "offset solid sales of its small, fuel-efficient vehicles in North America, Asia and Europe." Mazda said that "strong overseas sales" helped it to reap "healthy profit growth." But "it joined its rivals in saying it expects the yen's appreciation and high materials prices to dent profits for the current fiscal year."
The
AP (4/25, Kageyama) added that "Honda saw its profit slashed by a tax, while Mitsubishi racked up costs for closing an Australian plant." The Tokyo Regional Taxation Bureau said that Honda "had not been taxed adequately for its Chinese joint ventures over a five-year span ended March 2006," and is therefore "demand[ing] additional taxes from" the carmaker. "Mitsubishi blamed the drop in earnings on the closing of its Australian factory in the southern city of Adelaide earlier this year."
The
Detroit News (4/26, Tierney) pointed out that "Honda forecast a 30 percent fall in operating profit for the current fiscal year, 'which is in line with our expectations,' investment firm Nikko Citigroup said in a research note." Although Honda "produces most of the vehicles it sells in North America in the region, the dollar's weakness cuts the value of its U.S. earnings."
