Honda’s Profits Drop Due to Semiconductor Shortage

According to the reports, the fiscal first-quarter profit of Honda dropped by 33 percent from 2021 due to global computer chip shortage, with a lockdown in China, and the increasing costs of raw materials also affected the Japanese automobile company hard.

Honda reported that its profits totalled 1.1 billion dollars in the April-June Quarter, down from 1.7 billion dollars in the previous year, and the company’s quarterly sales decreased by 7 percent to 28 billion dollars. Honda has kept its profit forecast for whole fiscal year till March 2023 unchanged at 5.3 billion dollars.

The global semiconductor shortage has hit all the automobile companies in the world, including Honda, despite having strong demand, and the producers are scrambling to secure alternative suppliers.

Honda sold around 815,000 vehicles in the last quarter, down from 998,000 vehicles in the same period earlier, and automobile sales have decreased in all regions across the world, including the United States, Japan, and Europe.

Kohei Takeuchi, chief financial officer of Honda, said he asked for understanding from all the customers who are still awaiting their vehicles, and vowed that their whole company is doing everything possible to make the deliveries as soon as possible.

Kohei Takeuchi also said the semiconductor shortage has affected motorcycle production and also care production. According to Honda, the recent lockdown in China was one of the main causes of the shortage in the supply of semiconductor chips.