Honda to Restructure Models after Posting ¥18 Billion Fiscal Quarterly Loss

Honda to Restructure Models after Posting ¥18 Billion Fiscal Quarterly Loss 1

Japanese automaker Honda reported a ¥13 billion ($118 million) loss for the fourth quarter of current fiscal year, which is a reversal from a ¥107.7 billion profit posted in the previous fiscal year.

Related: Suzuki to Log ¥80 Billion Loss Over Recall of 2 Million Cars

Despite growing sales, Honda reported a loss for January-March 2019 as an unfavorable exchange rate, income tax expenses and other costs hurt the results. Honda’s annual operating profit also fell short of the automaker’s own forecast.

Honda to Restructure Models after Posting ¥18 Billion Fiscal Quarterly Loss 2

While attending a news conference in Tokyo on Wednesday, Chief Executive Takahiro Hachigo announced Honda will reduce global production costs by 10% by 2025, streamline its product offerings, consolidate model variations, and increase parts-sharing to cut costs, with the first model developed under the new “architecture” launching next year.

Related: Honda Sets All-Time Fiscal Year Records for Automobile Production

Hachigo said that the number of variations currently available for its vehicles is too high, leading to excessive complexity and higher costs than necessary. To cure that problem, he said that Honda is going to slash the number of variations at the trim and option level for its global models to one-third of what it is now.

Additionally to save costs, Honda says it will be eliminating some similar regional models sold across multiple regions. Furthermore, inter-regional cooperation will reduce manpower needs by a third, which will instead be used for research and development, Hachigo added.

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About UsmanAnsari

A 3d animation professional with over 19 years of industry experience, an avid car enthusiast, petrolhead and social media influencer. Formerly written for PakWheels as well as major publications including Dawn. Founder of CarSpiritPK.com

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Najamuddin Sheikh
Najamuddin Sheikh
1 year ago

lol they are already consolidating models in Pakistan. same city for 10 years, & same civic fooled as facelift 🙂