Honda sales decline due to lack of chips

The Japanese automaker lost nearly 30% of sales in the third quarter and revenue fell 7% due to a chip shortage.

Honda has lowered its profit and sales forecast for the fiscal year ending March 2022 due to chip shortages and rising raw material costs. Honda is among many global manufacturers hit hard by chip shortages due to pandemic-related disruptions.

Model CR-V sold in Vietnam.  Photo: Luong Dung

Model CR-V sold in Vietnam. Photo: Luong Dung

Honda sold 917,000 vehicles in the July-September period, down from 1.25 million last year. The company expects to sell 4.2 million vehicles for the fiscal year to the end of March 2022. Previously, the company had forecast sales of 4.85 million vehicles. Honda sold 4.5 million vehicles in the previous fiscal year.

Honda Motor also recorded fiscal second-quarter profit down 31%, to $1.5 billion from $2.1 billion last year. Quarterly revenue fell 7% to $30 billion.

Honda Executive Vice President Seiji Kuraishi apologized for the matter: “We feel very sorry for everyone who is eagerly waiting for our car.”

Kuraishi said the supply situation has begun to improve, but a recovery in Honda production may not come this financial year. Honda plans to increase production next fiscal year to offset the loss, and current problems won’t affect investments in future technology such as electric vehicles.

The Japanese automaker expects a profit of $ 4.9 billion for this fiscal year, the data is calculated until the end of March 2022. This was down 16% from the previous fiscal year and was lower than the previous forecast of $5.9 billion in profit.

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