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Honda suffers 32 per cent drop in quarterly profit as it battles rising costs and semiconductor shortage

  • Japanese car giant says it made 192.9bn yen – some £1.23bn – in the three months to December 31
  • Increasing cost of raw materials plus ongoing semiconductor shortage take their toll
  • But full-year profit is now expected to be more than a fifth higher than predicted before

Time 2:20 pm, February 9, 2022

Honda saw its profit drop by 32 per cent in the last quarter of 2021 amid increasing costs of raw materials and the shortage of semiconductors.

The Japanese car giant said today (Feb 9) that it made a profit of 192.9bn yen (circa £1.23bn) for the three months to December 31 – down from 284bn yen (£1.8bn) the year before.

Quarterly sales revenue, meanwhile, slipped by two per cent to 3.7trn yen (£23.6bn).

As with all the other car makers around the world, Honda’s manufacturing has also been affected by delays caused by coronavirus restrictions, and it said it expected the challenges to continue.

Rising raw material costs are a problem as well, but Honda said cost-cutting efforts had meant it could raise its profit projection.

Its full-year profit forecast to March 31, 2022 is now 670bn yen (£4.3bn) – up 21 per cent from an earlier projection of 555bn yen (£3.6 billion) and an improvement on the 657bn (£4.2bn) it made in the previous financial year.

Meanwhile, it now expects sales revenue for the year to reach 14.55trn yen (£92.5bn) – a 0.3 per cent dip from its earlier forecast of 14.6trn yen (£93.1bn).

Its sales revenue in the previous financial year was 13,170.5trn yen (£84.06bn), meaning this year’s will be a 10.5 per cent increase.

John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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