Honda has expressed hopes that a visit to the US next week by Shinzo Abe, the Japanese prime minister, will help ease Donald Trump’s “misunderstandings” that have led the US president to take a critical stance towards Japanese carmakers.
“We have pursued a consistent policy of producing cars locally in America,” said Seiji Kuraishi, Honda’s executive vice-president, noting that 70 per cent of its cars produced in the US were sold there. “There seems to be a gap between the various things said on Twitter and the reality so I hope the misunderstandings will be resolved,” Mr Kuraishi added.
The comments by Japan’s third-largest carmaker highlight the increasing anxiety among Japanese businesses after Mr Trump threatened Toyota with a border tax for its plan to build a new plant in Mexico, and criticised Japan for what he described as a closed market for US cars.
Akio Toyoda, the president of Japan’s largest carmaker, met with Mr Abe on Friday evening and they are believed to have discussed Japan’s visit to the US and Mr Trump’s policies.
The sense of uncertainty comes as Honda boosted its annual guidance on the back of a Mr Trump-induced slide in the yen.
For the 12 months to the end of March 2017, Honda anticipated a net profit of ¥545bn ($4.8bn) — overshooting an earlier forecast of ¥415bn after it revised its outlook for the yen downward. The revised target was in-line with analyst forecasts for a profit of ¥540bn.
The upward revision came after the US dollar rose 15 per cent against the Japanese currency during the October to December quarter, as Mr Trump’s win in the US presidential election boosted hopes for stimulus measures and tax cuts.
Honda said its net profit for the fiscal third quarter rose 36 per cent compared with the previous year to ¥168.8bn, while revenue fell 3.2 per cent year on year to ¥3.5tn.
In addition to a rise in sales from new vehicle launches in the US and China, the strong quarterly result was prompted by a decline in costs related to the global recall of vehicles fitted with faulty airbags made by Takata.
However, Mr Kuraishi cautioned that the US market may be “heading south” from the next fiscal year after Honda sold a record 1.63m vehicles last year.
“Honda will likely be able to sustain its sales in the US if the US economy is boosted by stimulus. But the political uncertainty will continue to weigh on its outlook even as the company improves its overall profitability,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.
Honda, which employs 30,000 staff in the US, has not been directly targeted by Mr Trump but the company recently announced it would shift production of fuel-cell vehicle components from Japan to the US through a 50-50 joint venture with General Motors. The two companies said the new manufacturing venture would create nearly 100 jobs by 2020.
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