The worst is over, says CEO
15 May 2009

Honda’s earnings will start to recover from now on, having already hit rock bottom, according to the car maker’s chief executive.

Takeo Fukui said in an interview with Reuters that demand is set to slowly increase and the worst is now over.

"The last (January-March) quarter was the nadir, and things will gradually start to improve in the first two quarters (of this year)," Fukui said.

Honda’s annual profits have plummeted by 77 per cent after a decline in car sales.

Japan’s second-largest car maker posted a new profit of 137bn yen (£981m) for the year to 31 March, compared with 600bn yen (£4.3bn) a year earlier.

Sales have fallen by 17 per cent to 10 trillion yen (£75.1bn), which was Honda’s first decline in nine years.

There has been a huge slide in car sales in the US which has affected many manufacturers’ earnings.

The US slumped behind China as the world’s biggest car market this year, but Fukui expects American sales to pick up.

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"A 10 million unit (a year) market is abnormal for the United States," he added. "I think there's latent demand for 13 to 14 million units annually, and we'll get back to that level at some point."

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