The Big Three U.S. automakers have stolen most of the headlines between a $17.4 billion government bailout and massive fourth quarter losses, but things aren’t looking any better for Detroit’s Japanese counterparts. As sales continue to plummet in North America and Europe, the Japanese Big Three are bracing for one of the worst fiscal years in history.
Honda ’s lineup of fuel-efficient vehicles ensured the company survived $4 gas, but the economic collapse during the second half of 2008 has put a serious strain on the automaker’s bottom line. Honda’s operating profit in the third quarter tumbled 63 percent, forcing the Japanese automaker to further slash its fiscal year forecast. Just one month ago Honda reduced its operating profit forecast for the fiscal year ending March 31st to $1.88 billion, but that figure has been revised to just $1.46 billion – an 81.1 percent decline from the previous year, according to Automotive News.
The further erosion of Honda ’s operating profits can largely be attributed to the collapse in the North American market – Honda’s largest. North American sales dipped by 13.5 percent, leading to a 55.2 percent decline in operating profit.
Cross-country rival Toyota isn’t faring any better, with the world’s largest automaker preparing for its first operating loss. Toyota was predicting a $1.56 billion loss last month, but that figure has swelled to a massive $4.17 billion. It is also being reported that Toyota has just over $18 billion in the bank – roughly the same amount as Ford .
The Nissan camp is hurting as well, with Japan’s number three automaker expected to report an operating loss on March 31st.
