Honda Motor Co., Ltd. is a Japanese public multinational corporation known for manufacturing of automobiles, motorcycles and power equipment. (Photo : Reuters)
Honda is cutting its forecast for its whole-year net profit by 3.5 percent after increased costs due to recalls related to exploding air bags.
The Tokyo-based car maker announced on Friday that it now predicts a $4.6 billion net profit by the fiscal year, which ends in March. It is 5.1 percent less than the previous fiscal year, according to Market Watch. The announcement came after the recent Honda recalls.
Honda's net profit during the October to December period declined by 15.1 percent from the previous year to 136.5 billion yen, which is a bit lower than the average estimated 137.3 billion yen by 26 industry analysts.
The Japanese vehicle maker had to recall millions of its cars due to the unfortunate exploding air bag incidents which resulted into the death of five people.
Honda, founded in 1948, was recently fined by U.S. authorities for $70 million-currently the largest penalty given to a carmaker-due to its failure to report warranty claims, including more than 1,600 complaints regarding injuries and deaths linked to Honda's products.
The exploding air bags from the Honda recall was from another Japanese firm Takata Corp.
The Honda recall saw more than 24 million automobiles recalled across the globe because of the exploding air bag from Takata, BBC News reported.
Even with the aftermath of Honda's recalls, the firm's executive vice president Tetsuo Iwamura made a statement during a press conference that there was no "big impact" on North American sales regarding the exploding air bag incidents.
In addition, Honda also cut its whole-year sales target from 4.62 million cars down to 4.45 million.
