Honda cuts profit target as Takata air bag recalls bite

Honda sliced 6.5 per cent off its core annual profit forecast as it set aside hundreds of millions of dollars in extra cash to cover an extended car recall to replace potentially faulty air bags made by Takata.

Reporting that its third-quarter earnings fell by nearly a quarter as it soaked up recall costs, Japan’s third-largest automaker said it now expects an operating profit of 720 billion yen (€5.40 billion) for the year to March 31st.

It previously forecast 770 billion yen, but has set aside an extra 50 billion yen to cover what it said were quality-related costs including the Takata air bag recalls.

Honda also said that it now expects to sell a total of 4.45 million cars this fiscal year, down from the 4.62 million it previously forecast, as sales in Japan fall short of its original target. – (Reuters)