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TOKYO – Profit tumbled 40 percent at Honda Motor Co. in the most recent quarter on a deteriorating sales mix, rising incentives and foreign exchange losses.
Operating profit dropped to 170.1 billion yen ($1.54 billion) in the fiscal third quarter ended Dec. 31, Honda said on Friday.
Net income plunged 71 percent to 168.2 billion yen ($1.53 billion) in the October-December period. Revenue advanced 0.4 percent to 3.97 trillion yen ($36.01 billion), as worldwide sales increased 4.8 percent to 1.41 million vehicles in the three-month period.
Results retreated on narrowing margins as customers rush away from the sedan segment where Honda is traditionally strong with the Civic and Accord sedans.
Increased sales expenses and warranty outlays also dented the bottom line.
Honda splashed out incentives to sell down the outgoing generation of the CR-V crossover, Executive Vice President Seiji Kuraishi said while outlining results. Honda said it also changed its accounting method for incentives which caused an on-paper increase.
Warranty costs climbed as the company recalled the CR-V to fix and engine problem.
Honda profit tumbles 40% on higher incentives, weaker sales mix
Operating profit dropped to 170.1 billion yen ($1.54 billion) in the fiscal third quarter ended Dec. 31, Honda said on Friday.
Net income plunged 71 percent to 168.2 billion yen ($1.53 billion) in the October-December period. Revenue advanced 0.4 percent to 3.97 trillion yen ($36.01 billion), as worldwide sales increased 4.8 percent to 1.41 million vehicles in the three-month period.
Results retreated on narrowing margins as customers rush away from the sedan segment where Honda is traditionally strong with the Civic and Accord sedans.
Increased sales expenses and warranty outlays also dented the bottom line.
Honda splashed out incentives to sell down the outgoing generation of the CR-V crossover, Executive Vice President Seiji Kuraishi said while outlining results. Honda said it also changed its accounting method for incentives which caused an on-paper increase.
Warranty costs climbed as the company recalled the CR-V to fix and engine problem.
Honda profit tumbles 40% on higher incentives, weaker sales mix
