Honda withdraws annual guidance
By Chang-Ran Kim
TOKYO (Reuters) - Honda Motor Co (7267.T: Quote) withdrew its annual earnings guidance in an unusual move on Monday due to uncertainty surrounding currency markets and Thailand's floods just as it was starting to recover from the March earthquake and tsunami.
Among Japanese automakers, Honda has been hit the hardest by both disasters this year, recovering slowly from the supply disruption in northeast Japan and suffering direct damage at its Thai car factory in the Ayutthaya industrial estate.
Honda's U.S.-listed American Depositary Receipts (HMC.N: Quote) tumbled 7.5 percent from Friday's close to $30.10 in premarket trading.
The maker of the popular Civic and Accord models had been preparing to ramp up overall car production to 125 percent of pre-quake plans in the October-March second half to build up inventory that had fallen after the March 11 disasters at home.
Even before the floods, the dearth of cars had sunk Honda's sales in the United States, its biggest market, ranking it below Nissan Motor Co (7201.T: Quote) in the last three months.
"To put it bluntly, we're in a really tough spot," said Fumihiko Ike, Honda's chief financial officer. "We're in a much more difficult position because our car factory is inundated."
Honda, the only automaker in Thailand with a flooded factory, builds about 5 percent of its cars there, with more than a third of the vehicles bound for export.
Like Toyota Motor Corp (7203.T: Quote) and Nissan, Honda also uses Thai-made components in other markets, meaning output reductions elsewhere in Southeast Asia, Japan and eventually the United States are also expected as supply runs out, Ike said. Continued...