In FY2011-12 Honda Motors Suffered 60.4% Decline in Profits

Fiscal Year 2011-12 did not go great for the Japanese car maker Honda Motors as its net profit saw a steep dip of 60.4 percent. This decline can be attributed to three major factors that were in news the most for the entire last year – Earthquake and Tsunami that devastated Japan, unrestrained and violent floods in Thailand and worsening economic condition in Europe. During the time, natural disasters had hit the lands of Japan and Thailand, the production of Honda Motors witnessed a temporary impasse. This situation in addition to the strong yen currency had a ruinous effect on the sales and profits of the exporters. Whenever the currency faces an increase in value the exports suffer the most as overseas exports become more expensive and profits gets cut down by a large degree. The disaster and strong yen in confluence had adverse effects on the overall sales and profits of the company.

The net profits of Honda Motors Japan for the FY2011-12 were recorded as 211.5 billion yen or 2.63 billion USD, the total profits in the FY2010-11 were recorded as 534.1 billion yen or 6.67 billion USD. The sales of the Honda Motors are suffered a huge blow which resulted in the revenue through sales to slide down by 11.1 percent at 7.95 trillion yen or 99.2 billion USD. At the same time the operating profits of the company went down by massive 59.4 percent in comparison to previous year figures at 231.4 billion yen or 2.88 billion USD. Honda Motors, the third largest auto maker of the Japan holds a positive attitude and has linked hopes with the results of the FY2012-13. The company is expecting a quick convalescence and has anticipated the profits to increase to 470 billion yen or 5.87 billion USD. The revenue from sales is expected to grow to 10.3 trillion or 12.9 billion USD; the operating profit is anticipated to grow to 620 billion yen or 7.74 billion USD.