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Honda rebounds from the red

Published:Sunday | May 2, 2010 | 12:00 AM

TOKYO (AP):

Honda posted a 72 billion yen (US$774 million) profit for the January-March quarter in a reversal from red ink a year earlier as booming demand in China and India combined with a fledgling United States recovery to boost car sales.

Honda Motor Co, Japan's No. 2 automaker, reported Wednesday that quarterly sales surged 28 per cent from a year earlier to 2.28 trillion yen (US$24.5 billion).

Honda, which makes the Insight hybrid and the Odyssey minivan, sold 874,000 vehicles for the fiscal fourth quarter, up 28.5 per cent from 680,000 the year before.

Honda's better fortunes mirror similar recoveries at other Japanese automakers, whose results had been battered the previous year by the financial crisis.

Honda's sales in Japan recovered, helped by tax breaks for 'green' models and brisk demand for smaller models like the Fit, Honda said.

For the fiscal year ended March 31, Honda reported a 96 per cent rise in profit to 268.4 billion yen (US$2.9 billion). Sales of 8.58 trillion yen (US$92.3 billion) were down 14 per cent from the previous year.

Honda is expecting better results for the fiscal year through March 31, 2011, forecasting 340 billion yen (US$3.7 billion) in profit, up 27 per cent from the fiscal year just ended.

Sales are projected to climb 9 per cent to 9.34 trillion yen (US$100.4 billion), it said.

Recovering moderately

The automaker is targeting sales of 3.6 million vehicles for the current fiscal year, up nearly 7 per cent from 3.4 million last year.

Honda's US sales have been recovering moderately, while the European market was also gradually beginning to recover in the latter half, helped by government incentives, according to Tokyo-based Honda.

Honda also has a strong motorcycle division, which contributed to earnings with a 30 per cent sales increase to 2.6 million motorcycles for technical service bulletin he quarter.

Mazda Motor Corp and Mitsubishi Motors Corp - Japan's No 4 and No 5 automakers - also posted net profits for the January-March quarter, reversing losses from a year earlier.

Toyota Motor Corp, the world's biggest automaker, whose sales have been hurt by a recall crisis, and Nissan Motor Co, allied with Renault SA of France, this nation's No 3 automaker, report earnings next month.

Honda shares lost 1.5 per cent to 3,285 yen (US$35) in Tokyo.