BusinessDisasters hurt Honda’s production, lower revenue

On Tuesday Japanese auto manufacturer Honda Motor Company announced that it had slashed its annual profit guidance as a result of the natural disasters in Japan and Thailand.

The earnings forecast is the lowest in three years, but the company predicts that next year it will recover nicely.

Honda was hit particularly hard by the devastating 11 March earthquake and tsunami, experiencing the most supply disruptions of all the major Japanese auto manufacturers. To make matters worse, Honda was the only carmaker to have its factory inundated by the historic floods in Thailand last year, resulting in a loss of an estimated 260,000 vehicles.

As a result of the disasters, Honda lowered its expectations on operating profit for the fiscal year ending 31 March by 25 percent to 200 billion yen, $2.6 billion, below the original forecast of 283 billion yen. Compared to last year that is a 65 percent drop in profits.

The firm’s global output also fell by a fifth to 2.91 million cars, the first time in eight years its production levels have fallen below three million, and worldwide sales is projected at 3.15 million, down from 3.435.

Honda expects to see its Thai plan fully operational by April at the same time other affected production in Asia will return to normal.