TOKYO -- The U.S. incentive war exerted downward pressure on North American quarterly earnings for Honda Motor Co.
Between April and June, Honda's North American operating profit plunged by 25.8 percent from the year-ago period with earnings of $743.8 million.
Honda says it spent an average of $840 a vehicle in the United States to promote sales during the quarter. That amount is far more than the $500 per vehicle it had planned to spend and the $240 per vehicle it spent in the year-ago period.
"We spent mainly on the Civic and the Accord," said Koichi Amemiya, Honda's executive vice president, at a press conference last week.
He declined to discuss how much Honda spent on those models.
Honda's North American sales slipped by 1.5 percent during the quarter compared with the year-ago period.
| Honda profits | ||
| Earnings results for Honda Motor for 3 months ending June 30. Figures are in millions. Consolidated results include most major subsidiaries. | ||
| TOTAL | CHANGE | |
| Revenue | $19,119.70 | 3.20% |
| Operating profit | 1,475.50 | 0.30% |
| Net income | 1,053.80 | 12.20% |
| Source: Honda | ||
Its U.S. sales edged up 0.9 percent to 349,000 vehicles. But its quarterly sales in Canada slid by 20.5 percent to 35,000 vehicles.
Still, Honda is maintaining its North American sales forecast for this fiscal year, which began April 1. The automaker says it expects to sell 1.56 million vehicles during the fiscal year, 0.4 percent more than it sold in the previous year.
Honda's operating profit in Europe surged by 153.4 percent in the quarter to $138.2 million. The Jazz and Civic remain popular in the region, as does a diesel version of the Accord, Honda says.
The automaker's European sales jumped by 17.9 percent from the year-ago quarter to 66,000 vehicles. Its sales in Japan increased by 0.7 percent to 154,000 vehicles.
The shrinkage in North American gross profits and losses from currency fluctuations combined to limit the increase in Honda's overall profits.
The company's consolidated, or group, operating profit in the three months increased by 0.3 percent to $1.5 billion.
Honda's net quarterly income rose by 12.2 percent to $1.1 billion. Its revenues of $19.1 billion were up 3.2 percent from the year-ago quarter.
The strengthening of the yen against the U.S. dollar and the euro during the quarter cost Honda $386 million on an operating basis.
