Honda slashes forecast on territorial spat with Beijing
October 30, 2012, 12:09 am TWN
TOKYO -- Honda Motor shares tumbled on Monday after the Japanese automaker warned that its full-year results would be much weaker than forecast, as a trade dispute between Tokyo and Beijing dents sales.
Investors dumped the shares, which fell 4.65 percent to 2,399 yen by the close in Tokyo, on news that the maker of the Accord and Civic would report an annual profit that was 20-percent lower than previously expected — even as its first-half profit more than doubled to US$2.7 billion.
Honda's stock was down 6 percent in earlier trade after it mistakenly released earnings three hours ahead of schedule due to a “human error.”
Blaming a strong yen and weakening sales, Japan's third-biggest automaker said it now expects to earn 375 billion yen (US$4.7 billion) in its fiscal year to March 2013, down from an earlier 470 billion yen forecast.
Sales were tipped to fall to 9.8 trillion yen, from 10.3 trillion yen.
A Honda statement did not offer details about the Japan-China spat, but company officials told a press conference in Tokyo later Monday that the firm was cutting its full-year sales forecast in China to 620,000 vehicles, down from 750,000 units.
The diplomatic dispute over an East China Sea island chain, which has slammed the brakes on sales of Japan-brand cars in China, the world's biggest car market, was expected to weigh on demand until February, they said.
The two Asian giants remain locked in a festering row over the archipelago controlled by Japan but claimed by China, sparking double-digit sales declines in September for Japan's biggest automakers.