TOKYO (Reuters) - Honda Motor (7267.T) said the impact of U.S. steel and aluminum import tariffs on its bottom line had so far been limited, as it posted a surprise jump in quarterly profits to their highest in more than a decade on improving North American sales.
FILE PHOTO: The logo of Honda Motor Co and an airbag logo are seen on a steering wheel of a car displayed at the company's showroom in Tokyo November 4, 2015. REUTERS/Issei Kato/File Photo
The automaker also forecast a less than previously expected drop in annual operating profit and, while it lowered its global vehicle sales view given floods in Mexico are expected to drag on output, the number is still expected to be a record high.
The promising results and earnings outlook from Japan’s No.3 automaker stands in stark contrast to the dull forecasts from several major automakers hurt by rising raw material costs. A possible hike in U.S. tariffs on imported cars is further muddying projections for the sector globally.
Detroit automakers General Motors Co (GM.N), Ford Motor Co (F.N) and Fiat Chrysler Automobiles (FCHA.MI) (FCAU.N) lowered their full-year profit forecasts just last week amid worries escalating tariffs would hurt margins and sales.
Honda, however, said its policy of localizing production and procurement was acting as a buffer for now in the United States - a key market for the company.
“Roughly 90 percent of our steel and aluminum needs in the United States are procured locally,” Honda Senior Managing Director Kohei Takeuchi said at an earnings briefing on Tuesday. “Overall we’re not seeing a big impact (from tariffs) so far.”
For the first quarter ended June, Honda’s operating profit rose 11.2 percent to
