Honda loses more than Ford (?) but but ekes out net profit for full year

[mkrishnan]

http://www.nytimes.com/2009/04/29/business/global/29honda.html?_r=1&ref=business

TOKYO — Honda Motor lost $1.9 billion in its latest financial quarter but eked out a net profit for the year that ended in March, setting itself apart from Chrysler and General Motors, the Detroit automakers that are fighting for survival, as well as Toyota, which predicts a deep loss this year.

Like other carmakers, Honda has been squeezed by the global economic slowdown as plunging sales and surging inventories have forced it to cut back on production. But its lineup of cheaper cars, a robust motorcycle business and aggressive cost-cutting have helped Honda, the second-largest Japanese automaker by sales, after Toyota, fare relatively better amid recent difficulties.

Honda, the maker of the Accord and Civic models, swung to a net loss of ¥186.1 billion in the January-to-March quarter from a profit of ¥25.43 billion a year earlier. For the year that ended March 31, Honda booked a profit of ¥137 billion, down 77 percent from the previous year but beating forecasts.

Actually, I don't know if the accounting is comparable enough to make the claim that their loss was wider than Ford's most recently reported $1.4B loss, but certainly, to me, Honda of all non-Korean automakers is best poised for a green-friendly future. I wish their cars were fun to drive, and that they brought some of their more creative ideas from the Japanese market abroad, but those are side issues...

They certainly deserve kudos for being able to make a profit on the year just ended.

[Zombie Acorn]

I actually like how they have changed the accord recently, their lineup is still a little bland for my taste (always has been). If they had a sportier looking car with good mileage I would buy one.

[rasmasyean]

They also have a stand-out marketing campaign a lot of it due to Asimo the robot that makes appearances all over the place.

Check out this new device they are coming out with.

Honda Walking Assist Devices
http://www.youtube.com/watch?v=mvrK2HGhV-g

[Desertrat]

Honda apparently had three quarters of profitable sales, vs. only one quarter of losses. SFAIK, Ford continually lost money throughout the year. It's the usual deal of foreign manufacturers having lower overhead per car.

[mkrishnan]

I actually like how they have changed the accord recently, their lineup is still a little bland for my taste (always has been). If they had a sportier looking car with good mileage I would buy one.

I actually like the looks of a few of their cars -- both the latest Civic and Accord, and also some of the Acuras. I just don't think any of them are particularly fun to drive. :o The RSX was the last I really enjoyed driving, and it had some charm, but it was all in an overglorified motorcycle kind of way. :eek: :o

[Counterfit]

Subaru's sales have been up slightly over the last two years. So http://clicksmilies.com/s1106/aktion/action-smiley-075.gif to Honda!

[SactoGuy18]

I would be driving a 2009 Honda Civic EX sedan right now if I had the money. :) The problem with its nearest competitor--especially the Toyota Corolla--is that they either have no power or gas-guzzling engines. The Civic's 1.8-liter R18 engine has power and doesn't guzzle gas, either.

[iJohnHenry]

Let us not forget Hyundai/KIA (http://en.wikipedia.org/wiki/Hyundai_Kia_Automotive_Group) in the discussion of growth/loss.

They come down on the growth side.

[mkrishnan]

Let us not forget Hyundai/KIA (http://en.wikipedia.org/wiki/Hyundai_Kia_Automotive_Group) in the discussion of growth/loss.

They're going to continue to grow like gangbusters, I think. In fact, back when I was in the automotive industry, I was really convinced that Toyota was in the same prodromal phase to GM's then stagnation (and now near ruin) as GM was in a couple decades ago. Toyota runs a substantial risk of being out-Toyota'd by the Koreans (who may ultimately be out-Koreaned by the Indians or Chinese, although that is a way off).

I have essentially two problems with Korean cars at this point -- I think their quality is tracking to improve into being a non-issue, and I think they produce some fairly pretty designs. Now, I think the major problems are ...

- That they don't have the Japanese emphasis on fuel efficiency or environmental friendliness (or the European emphasis on clean diesel).

- Secondarily that they still don't produce vehicles with good vehicle dynamics, which is really more particular to me and less to their presence in the market (since I lump most of the Japanese aside from Mazda, and the Americans aside from Ford, in this category also).

[Counterfit]

- Secondarily that they still don't produce vehicles with good vehicle dynamics, which is really more particular to me and less to their presence in the market (since I lump most of the Japanese aside from Mazda, and the Americans aside from Ford, in this category also).

From all that I've heard and read, the Genesis is one sweet piece of car-ass.

[zap2]

I actually like the looks of a few of their cars -- both the latest Civic and Accord, and also some of the Acuras. I just don't think any of them are particularly fun to drive. :o The RSX was the last I really enjoyed driving, and it had some charm, but it was all in an overglorified motorcycle kind of way. :eek: :o

Hey, I love my RSX!

I wish Acura still made it, its put me into a spot where there is little room for me to upgrade,admittedly, that isn't a huge issue, as a new car isn't coming soon, and my RSX is newish(for me)

[mkrishnan]

From all that I've heard and read, the Genesis is one sweet piece of car-ass.

It seems like a very interesting move for Hyundai, although to be honest, it seems to slot itself exactly into that sort of, "I want a 'sports sedan' with tons of standard features and a low price, but I don't know how to use a manual transmission and place limited value on vehicle dynamics" segment in which Acura flounders with the TL and so on... I think they can sell a car and make a profit in that segment -- I assume Acura does -- but it doesn't really establish a sports sedan reputation. At least in the US, those Acuras veered into a fairly separate market.

But on the other hand, Hyundai seems okay with this, and, once again, it seems like an example of how Hyundai can bite at the ankles of the Japanese.

Hey, I love my RSX!

I was sorely tempted by the RSX. But don't you think it's a fair characterization? I mean, the way that Type S engine sounded in the back seat near the red line was like nothing more than a motorcycle. But it's easily the most fun I've ever had in a Japanese car that was not made by Mazda.

It's kind of sad that the Integra had acted as a halo car to the drivers' car market for so long for Honda, and that even though the RSX was a beautiful evolution of the Integra, it never really worked out for them.

[mkrishnan]

Toyota's numbers came out, and they lost even more than GM... :eek:

http://www.nytimes.com/2009/05/09/business/global/09toyota.html?hp

TOKYO — The Toyota Motor Company booked its first annual net loss in six decades Friday and warned that it would plunge even deeper into the red this year, a stunning reversal for an automaker whose breakneck expansion and record profits seemed unstoppable just 12 months ago.

The automaker said it lost 765.8 billion yen, or $7.7 billion, in the first three months of the year — even more than the $5.9 billion lost by its American rival, General Motors, in the same period.

The devastating numbers from the final quarter of the fiscal year contributed to a worse-than-expected net loss of 436.9 billion yen, or $4.4 billion, for the year that ended in March. It was Toyota’s first annual net loss since 1950.

The automaker warned it would lose another 550 billion yen, or $5.5 billion, this fiscal year. It cut its annual dividend by nearly 30 percent, its first cut to the dividend in at least 15 years.

Toyota attributed its woes to the slump in global demand and a strong yen, which makes exports from Japan more expensive.

“It will take more time before the financial markets in the U.S. and Europe normalize and the global economy recovers,” Toyota’s president, Katsuki Watanabe, said Friday. “We were lacking in scope and speed in dealing with various problems and for that I am sorry.”

The deep loss marks a stark turnabout from the record profit of 1.72 trillion yen that Toyota booked the previous year. Annual sales slumped 22 percent, to 20.529 trillion yen.

I do enjoy the very Japanese fact that the Toyota CEO is actually willing to admit that his decisions were at least in part to blame for the company's performance (in stark contrast, considering that Toyota did most things right, whereas GM and Chrysler did most things wrong and Wagoner and Nardelli were willing to take little personal responsibility).

Toyota of course has so much market capitalization and an adequate cash hoard and so isn't in much danger in the way GM is. On the other hand, I do somewhat think that, although they've made a number of other hybrid models since the first generation Prius came out, they haven't really implemented their green car vision. The fact that they're already on the cusp of delivering the third generation of a car that was designed from the ground up to be a hybrid, is very impressive. But, while the Prius was a standout as a Toyota people genuinely enjoyed owning for reasons other than the fact that it had low TCO and didn't break down, I'm left with the feeling that they haven't leveraged this enough to make their line look less staid.

[quagmire]

Toyota's numbers came out, and they lost even more than GM... :eek:

http://www.nytimes.com/2009/05/09/business/global/09toyota.html?hp



I do enjoy the very Japanese fact that the Toyota CEO is actually willing to admit that his decisions were at least in part to blame for the company's performance (in stark contrast, considering that Toyota did most things right, whereas GM and Chrysler did most things wrong and Wagoner and Nardelli were willing to take little personal responsibility).


Nardelli didn't have enough time to mess up Chrysler. Chrysler's mess stems from the DaimlerChrysler days. Most of the current product still stems from that mess.

[mkrishnan]

Nardelli didn't have enough time to mess up Chrysler. Chrysler's mess stems from the DaimlerChrysler days. Most of the current product still stems from that mess.

I guess I'll give him a bit of a walk, yeah, although I find him generally an unpleasant kind of personality, at least publicly, even moreso than Wagoner, which makes me disinclined to go easy on him.

In honesty, Chrysler's problems go way back, as I think we discussed in another thread. Far before Daimler foolishly got involved, or now that Fiat is foolishly getting involved (God, I would much sooner buy a Fiat branded Fiat than I would touch one that had a Chrysler badge on it). In the series of events that led up to them needing to think of the LH cars as their "Last Hope," they were already pretty miserable, and the LH cars were really more of a bandaid than a clear vision to lead them to being effective in the market.

Toyota I guess is a case study of long-term thinking and its ups and downs. Its placement in Japan, the Japanese mentality towards a company's corporate citizenship responsibilities and profit responsibilities, and the way they valuate businesses, all protect it from pressure to do something stupid because it lost several billion dollars. To Toyota's credit and to the credit of the Japanese.

[SactoGuy18]

If I remember correctly, Toyota has been quietly working on clean diesel engines that could meet even US emission laws. Don't be surprised that within two years most of their SUV/truck line runs off turbodiesel engines for the US market, which means at least 25-33% better fuel economy than now. :)

[Thomas Veil]

http://www.nytimes.com/2009/05/09/business/global/09toyota.html?hpI like the way Toyota's "so far held off" laying off workers who have lifetime employment guarantees. :D

Toyota I guess is a case study of long-term thinking and its ups and downs. Its placement in Japan, the Japanese mentality towards a company's corporate citizenship responsibilities and profit responsibilities, and the way they valuate businesses, all protect it from pressure to do something stupid because it lost several billion dollars. To Toyota's credit and to the credit of the Japanese.Without making excuses, I guess I could see a reason for the American companies to follow the business plan they did. There is a tendency for businesses to not imitate each other, but to find their own niche...and it has a lot of historical precedent to back it up. I remember when TV networks (back when the Big Three were dominant) would schedule cop shows against each other, or doctor shows. It was a formula for failure. Somebody always got trounced. But when they scheduled a crime show against a family drama, they each got their own niche audiences.

I think the car companies tried to practice the same thing. Instead of copying what the Japanese were already doing well (small cars), they decided to focus on SUVs, trucks and powerful cars. In theory it seemed like a good idea; in practice all it took was high gas prices to send their sales into the dumper.

This is especially true when you have a whole division devoted to performance cars, e.g. Pontiac. If Toyota has a performance model, it's only that car that suffers; if GM has the same problem, it affects an entire division of the company.

Frankly, I don't know that bankruptcy or bailouts are going to help GM or Chrysler unless they also get visionary leadership. They each need the automotive equivalent of a Steve Jobs to run their companies.

[cjm3113]

I can't believe Toyota and Honda are receiving praise for putting up losses just like the American companies - who people bad mouth.

Ford declined bail out money, outsold Toyota, and has the best line up from top to bottom of any auto company in the world. Yet, Americans turn to Japanese car companies. It's a shame.