Honda Motor Co, the Japanese automaker at the center of an air-bag defect scandal, lowered its annual earnings forecast on Friday, after quarterly profit slipped 15 per cent due to recall expenses. The Tokyo-based manufacturer of the Odyssey minivan, Fit subcompact and Asimo robot recorded a 136.5 billion yen ($1.16 billion) profit for the three months through December 2014, in line with forecasts by analysts.
Honda said it was hurt by recall expenses, mainly in North America. Honda is the automaker hardest hit by the quality woes over Takata Corp. Air-bags that explode. It relied on that Japanese supplier most heavily. The company now expects a profit for the fiscal year through March of 545 billion yen ($4.6 billion), down from its previous forecast for 565 billion yen ($4.8 billion). That would mark a 5 per cent drop from the profit reported the previous fiscal year.
Honda also lowered its global vehicle sales forecast for the full year to 4.45 million vehicles from 4.6 million. The less optimistic forecast is still better than the 4.3 million vehicles Honda sold around the world the previous fiscal year. The massive quality problem at Takata centers on air-bag inflators that can explode with too much force, blowing apart a metal canister and sending fragments into the passenger compartment.