TOKYO (AFP) - Japan's third-ranked automaker Honda Motor said sales hit a record high in the six months to September but the profit performance was undercut by a stronger yen while record oil prices are a problem going forward, especially in the key US market.
The company said it had experienced brisk sales of cars, motorcycles and generators, with revenue rising 3.5 percent from a year earlier to a record 4.17 trillion yen (39 billion dollars) while pretax profit was up 2.3 percent to 339.7 billion yen.
Net profit edged up only 0.9 percent to 241.4 billion yen.
"Worldwide unit sales of motorcycles, automobiles and power products all increased and set new records for the fiscal first half," Honda Motor Co. Ltd. said in a statement.
The strengthening of the Japanese currency to 110 per dollar from 118 the previous year trimmed 72.8 billion yen from operating profits, said Honda spokeswoman Makiko Yoshida.
The positive first half prompted the company to upgrade its full-year forecasts, she said.
Net profit for the year to March 2005 is now seen at 447 billion yen, up from the 417 billion yen estimated in July, with pretax profit raised to 600 billion yen from 550 billion and revenues put at another record of 8.69 trillion yen, up from 8.56 trillion yen.
"A fifth consecutive all-time record is forecast for consolidated net sales and other operating revenue (for the fiscal year) based on all-time record unit sales," the company said.
However, there are potential problems given the problem of high oil prices which is hitting the consumer, especially in the key US market.
"Uncertainty over higher oil prices is affecting negatively consumer sentiment, especially in the US," Honda vice president Hideki Amemiya told a news conference.
Honda's global auto sales rose 2.5 percent year-on-year to 3.35 trillion yen in the first half, largely on robust sales in Asia and Europe.
In Japan, car sales increased 14.2 percent to 720.6 billion yen, were up 26.5 percent to 332.7 billion yen in the rest of Asia, and rose 15.9 percent to 292.4 billion yen in Europe.
However auto sales in North America fell 7.7 percent to 1.86 trillion yen, partly reflecting how oil prices have hit consumer sentiment.
"We plan to increase sales incentives, with which we are determined to achieve our initial sales target," said Amemiya.
Honda's motorcycles remain popular in Asia. Sales in the first half rose 11.6 percent to 5.28 billion yen in total and, excluding Japan, were up 12.8 percent to 4.16 billion yen.
"Sales in India and Indonesia were especially brisk," said Honda executive manager Satoshi Aoki.
10/27/2004 - 10:30 GMT - AFP