(c) 2013, Bloomberg News.
(c) 2013, Bloomberg News.
TOKYO — Honda, Japan's third- largest carmaker, reported second-quarter profit that fell short of analysts' estimates amid slowing motorcycle sales and demand in Southeast Asia.
Net income climbed 46 percent to 120.4 billion yen ($1.2 billion) in the three months ended Sept. 30, compared with 82.2 billion yen a year earlier, the Tokyo-based company said in a statement Wednesday. That trailed the 139 billion yen average of seven analyst estimates compiled by Bloomberg. The company maintained its full-year profit forecast for 580 billion yen.
Honda, the world's largest motorcycle maker, reported quarterly two-wheeler sales in Southeast Asia that were little changed from a year earlier. Vehicle deliveries in Thailand, the automaker's largest market in the region, fell 22 percent in the July-to-September period as government incentives ended.
"The motorcycle business hasn't expanded as the company expected," said Satoru Takada, an auto analyst with Toward the Infinite World Inc. "If there's any concern for Honda in the second half, it will be the motorcycle business and the economic slowdown in Southeast Asia."
Honda is among Japanese exporters benefiting from Prime Minister Shinzo Abe's economic policies, which have helped weaken the country's currency. A weaker yen increases the value of repatriated earnings and is giving Japanese carmakers an edge over rivals including General Motors and Hyundai.
The yen has fallen about 12 percent against the dollar in 2013, creating a tailwind for Japanese brands as they face the most competitive lineup of vehicles in a generation from U.S. automakers GM, Ford and Chrysler.
Before Abe's election, the Japanese currency hobbled exporters for years, appreciating to a postwar high of 75.35 to the dollar in October 2011 from about 115 in a four-year period. The yen began tumbling in late 2012 as polls showed Abe, who called for unprecedented monetary-easing policies that would weaken the currency, would lead his Liberal Democratic Party to a win in the nation's parliamentary elections.
Honda deliveries in the U.S., its biggest market, gained 13 percent in the July-September quarter, according to the company. Sales were boosted by the Civic compact, the best-selling small car this year whose deliveries rose 8.8 percent and the Accord sedan, which increased 14 percent this year.
The automaker managed to keep incentives low even as sales expanded. The average incentive spending per vehicle fell 30 percent to $1,611 in the first nine months of this year, the lowest level among the six biggest car manufacturers in the U.S., according to market researcher Autodata.
Japan deliveries rose 2.5 percent to 179,731 units in the quarter, helped by the revamped Fit compact, Honda's best- selling model in the country.
Honda introduced the new Fit on Sept. 6, booking 62,000 units in sales and advance orders in the first four weeks, four times what Honda had forecast. About 70 percent of the sales and orders were for hybrids, according to Honda.
"It's a long-awaited model and a very important one for Honda's share price," said Kota Yuzawa, an analyst with Goldman Sachs in Tokyo. "The success of the model will be important to Honda's earnings mainly in the second half this year."
Honda, which introduced its N-Box minicar line in 2011, almost doubled its market share in the category to 18.4 percent in 2012 from a year earlier, according to Japan Mini Vehicles Association. Minicars accounts for about 40 percent of new-car sales in Japan.
In China, where Japanese carmakers count the April-to-June quarter into the July-to-September earnings, Honda deliveries fell 2 percent in the three-month period.
Things are starting to look up for the country's automakers in China, the world's largest auto market. Honda's sales doubled in September to the highest level in 21 months, helped by demand for the Accord and Crider sedan, the company's first model developed in China for the local market, according to Honda.
Honda had forecast in April for motorcycle sales to increase 12 percent to 17.4 million units globally in the year ending March 2014. In the second quarter, the company sold 4.1 million units, or 5 percent more than a year earlier.
In Southeast Asia, its biggest market for motorcycles, Honda's two-wheeler deliveries remained almost unchanged at about 2.12 million units in the quarter.
The end of government incentives also sent vehicle deliveries in Thailand down 22 percent in the July-September quarter. Honda had projected in April that fiscal-year deliveries in Asia excluding Japan to expand by 18 percent, according to the company.