Honda sees 68% drop in annual profit as coronavirus slams car sales

Japan's Honda Motor Co on Wednesday forecast a 68% fall in annual operating profit to a 10-year low with global demand for cars expected to slide due to the coronavirus pandemic.

The country's No. 3 automaker expects profit to sink to 200 billion yen ($1.89 billion) in the year to end-March 2021, its weakest since the 2010/11 year and worse than a consensus mean estimate of 260 billion yen in profit from 19 analysts polled by Refinitiv.

Honda's outlook comes after it posted a 113.7 billion yen operating loss for the June quarter, stung by a 40% plunge in global car sales.

Global automakers are taking a big hit from the coronavirus outbreak, which shuttered vehicle factories earlier in the year and has kept customers out of car dealerships.

Honda expects annual profit to fall with its global vehicle sales seen declining 6% in the year to March.

Honda sank into the red for the second straight quarter and posted its worst operating loss since the March 2009 quarter. That was bigger than a consensus estimate for an 85 billion yen loss compiled from eight analysts polled by Refinitiv.

In the June quarter, the maker of the CR-V SUV crossover and the Fit compact hatchback sold 792,000 vehicles globally. Sales in North America, its biggest market, plunged 68% to 159,000 units.

Despite the dire outlook, Honda has weathered the coronavirus pandemic better than rivals Nissan Motor Co, Mitsubishi Motor Corp and Mazda Motor Corp, which last week forecast record operating losses for the year.