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Disasters force Honda to slash profit outlook

Disasters force Honda to slash profit outlook
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Honda has slashed its forecast for annual profit to the lowest in three years but is anticipating a healthy rebound next year.

Japan’s third largest carmaker now believes operating profit for the financial year that ends in April will be 65 percent down on the amount it made a year earlier.

That follows natural disasters in Japan and Thailand as well as the strong value of the yen against other currencies which hit exports.

Honda was the slowest to recover from the supply chain disruptions after the Japanese earthquake and tsunami and it was the only carmaker whose factory was inundated by historic floods in Thailand, Southeast Asia’s export hub.

In the face of the disasters, the firm’s global output dropped last year by a fifth to 2.91 million cars, slipping below three million for the first time in eight years. With the exception of Nissan, production at other Japanese car manufacturers also fell but not so severely.