TOKYO — Japanese automaker Honda Motor Co., which has its global lead plant for the Honda Civic in Ontario, reported a 12 per cent rise in its January-March profit due to growing sales and cost cutting.
Tokyo-based Honda said Friday it posted a January-March profit of 107.7 billion yen (C$1.26 billion), up from 95.9 billion yen a year earlier. That's on sales of 3.9 trillion yen (C$45.96 billion), up four per cent.
Honda, which makes the Odyssey minivan and Asimo robot, says the results were achieved despite some unfavourable currency moves.
Honda, Japan's No. 3 automaker, locally produces most of the cars it sells in Canada and the United States, providing it some cushion against dollar fluctuations.
The company also suffered from costs related to a massive recall caused by faulty air-bag inflators made by Takata Corp. Honda was among Takata's biggest customers.
But that was offset by strong sales, especially of motorcycles, in other Asian nations such as India and Vietnam.
Honda's annual profit soared nearly 72 per cent to 1.06 trillion yen (C$12.4 billion), helped by a reduction of corporate tax rates in the United States.
It sold nearly 5.2 million vehicles around the world for the fiscal year, up from five million the previous fiscal year. That fell slightly short of its forecast for selling 5.22 million vehicles.
Honda is determined to boost sales in North America, the world's No.2 auto market, where competition has intensified amid a slowdown in overall sales growth, while demand has dropped for sedans -- a mainstay of Japanese automakers in the region.
Honda Canada earnings are not reported separately but included in North American figures each quarter. When it comes to Canadian sales during the first three months of 2018 were up 3.6 per cent. Honda sold 42,434 vehicles in January through March, compared with 40,917 in the same quarter last year.
When it comes to the Canada-made Civic, sales in Canada were down 6.1 per cent to 14,460 units, compared with 15,396 vehicles sold last year. South of the border, sales were up 0.6 per cent to 82,149 vehicles.
Honda expects to sell nearly 5.4 million vehicles for the fiscal year through March 2019.
Honda also on Friday forecast a surprise 16 percent drop in operating profit to 700 billion yen (C$8.25 billion) for the fiscal year ending in March 2019.
"Last year our (foreign exchange) rate was 111 yen and this year we are expecting 105 yen, so we'll feel a big currency impact from exports of auto parts and finished vehicles," Honda's senior managing director, Kohei Takeuchi, told reporters at a briefing.
A firmer yen eats into profits repatriated from abroad and raises the cost of exported vehicles and parts, making Japanese products less competitive overseas and denting margins.
Reuters contributed to this report.