TOKYO — North America was a weak link for Honda Motor Co. in the latest quarter as falling regional sales and profits weighed down a meager uptick in global operating income.
North American sales for Japan's No. 3 carmaker slid 5.7 percent to 481,000 vehicles in the fiscal first quarter ended June 30, while regional operating profit dropped 41 percent to ¥101.60 billion ($904.4 million).
In announcing the financial results last week, Executive Vice President Seiji Kuraishi said Honda trimmed production of the Accord to clear inventories ahead of the arrival this fall of the nameplate's full redesign. That cutback contributed to the regional sales decline, Honda said.
But the adjustment puts Honda in position to churn out more hot-selling trucks for the rest of the year, and the next-generation Accord will reduce the need to rely on incentives, he said.
"With the increase in light-truck supply, we hope to achieve record sales for this year," Kuraishi said
Booming business in Asia offset the North American slowdown. Anchored by China, the world's biggest auto market, Asia propelled parent company profit and sales growth.
Global operating profit edged ahead 0.9 percent to $2.4 billion in the fiscal first quarter while net income increased 19 percent to $1.85 billion. Revenue advanced 7 percent to $33.02 billion.
Overall profit improved as Honda put behind it expenses related to an earthquake in Japan that depressed earnings a year earlier. But gains were moderated by rising costs for such expenses as marketing and r&d as well as by foreign exchange rate losses.
Nevertheless, Honda lifted its full-year earnings outlook for the current fiscal year ending March 31, 2018, citing expected gains from shifting foreign currency rates.
Honda now predicts full-year global operating income of $6.45 billion. Net income now is forecast at $4.85 billion.
Naoto Okamura contributed to this report.