LONDON - The European arm of Honda Motor Co. said on Thursday it expected a small operating profit for 2002-2003, its first in two years, driven by cost cuts, rising sales and a windfall from a stronger euro.
"On the European front we are expecting a small profit this fiscal year ending March 2003," Mike McEnaney, director of Honda UK Manufacturing, told reporters. "We are ahead of targets."
In Tokyo last week, Japan's second-largest automaker said its European unit posted an operating profit of 30 million euros ($32.4 million) for the nine months through December 2002.
The company said at the time the return to profit was due to increased capacity utilization at its Swindon plant in western England, higher car sales and the rise in the euro against the yen.
Honda, which has a market share of only 1.2 percent in Europe, is targeting a 7-percent increase in European car sales to 210,000 for calendar 2003 from 196,000 last year.
Its 2003 target for global car sales is 3.1 million units.
Honda's biggest market in Europe is Britain, where it is targeting a 9-percent increase in car sales to 85,000 for 2003 from 78,000 last year.
Honda UK Managing Director Ken Keir said the changes at Swindon, a reduction in car dealerships in some markets, the introduction of new models and focus on the retail market would help Honda achieve its 2003 European growth targets.