Honda website
Honda website

DECEMBER 18, 2008

Honda predicts more trouble ahead

Amid rumours that its Acura ALMS programme may be under threat, the Honda Motor Company in Japan has issued a rather depressing end-of-year statement, in which it lays out a series of plans for the company.

"While hoping for the earliest recovery of the global economy and the market situation, Honda will develop business plans based on an assumption that the situation will worsen next year and will navigate the company through this challenge," it says. These plans include the postponement of several new plants around the world, the cancellation of the plan to introduce the Acura brand into Japan; the cancellation of the planned NSX successor and a renewed focus on smaller environmentally-friendly cars. Honda says that it is "critical for the company to further strengthen its ability to continue advancing environmental technologies and to apply them to creative and attractive products". The company is delaying its medium to large diesel engine development programmes and is concentrating on the development of smaller units.

The company has amended its forecast of consolidated financial results for the fiscal year ending March 31, 2009, which were announced at the end of October. The new forecast is for a 13% drop in sales (compared to 2007) and a drop in operating income of -81.1%. The company says that its car sales will be down 7%, but motorcycle sales will be up 10%. The company says that its executive bonuses will be reassessed based on the results and that some of its top executives will take a 10% cut in salary.