Honda's Q1 FY23 profit slumps 33%, blame it on chip crisis

Honda Motor Company on Wednesday reported a 33 per cent slump in its first fiscal quarter profit as compared to the same period last year. The automaker has blamed the profit slump on the semiconductor crisis and rising costs of raw materials. Apart from that, the pandemic-related lockdown in China too impacted the automaker's profit.

Honda reported that its profit totalled $1.1 billion in the April-June quarter, down from $1.7 billion a year earlier. Quarterly sales slipped seven per cent to $28 billion. Honda also kept its profit forecast for the full fiscal year through March 2023 unchanged at $5.3 billion.

The ongoing semiconductor crisis has hurt all the global automakers, including Honda, despite strong demand. This has prompted auto manufacturers to scramble for secure alternative suppliers. Honda reportedly sold around 815,000 vehicles last quarter, down from 998,000 vehicles in the same period last year. Its sales dropped in almost all regions around the world, including Japan, US and Europe.

Honda Chief Financial Officer Kohei Takeuchi said that the customers who are still waiting for their booked vehicles to be delivered to understand that the company is doing its utmost to make the deliveries even a day sooner. He further added that the semiconductor shortage has curtailed motorcycle production as well as car production while making future prospects uncertain as well.

Honda is not the only automaker that has witnessed its sales slump significantly due to the Covid-related problems including lockdown, microchip crisis, rising raw material prices etc. Several other automakers too have been facing these problems. This has prompted several automakers including Honda to shut down their respective manufacturing plants temporarily.