TOKYO – Honda Motor Co. said the global semiconductor shortage is bottoming out but still cut its global sales forecast as it warned that tight supplies will likely drag into the latter half of 2023.
Japan’s No. 2 automaker trimmed 250,000 units off its sales outlook for the current fiscal year ending March 31, citing lingering chip woes and uncertainty about the pandemic in China.
Honda now expects worldwide volume to dip under the 4-million-level to 3.85 million units.
The new sales target would register as a 5.4 percent sales decline from the previous fiscal year – as opposed to Honda’s previous forecast for a slight overall sales increase.
The volume languishes far below Honda’s global production capacity of 5.14 million.
Speaking at Honda’s quarterly earnings announcement on Friday, Operating Executive Eiji Fujimura said the supply of semiconductors is expected to pick up, but only in the second half of the coming fiscal year. That corresponds to a time frame of October 2023 to March 2024.
“I think we will see better procurement of semiconductors around that time,” Fujimura said, while announcing a 22 percent increase in quarterly operating profit.
“We are starting to see the situation bottom out.”
Honda cut 25,000 vehicles from its North American outlook. It now expects to sell 1.23 million vehicles in the critical market through March 31, down from the originally planned 1.25 million.
The forecast for Asia took the biggest hit, dropping by 220,000 vehicles to 1.86 million.
Honda kept its guidance for Europe, its smallest market, unchanged at 85,000 units.
Global automakers are expected to eliminate about 2.8 million vehicles from their production schedules this year because of the microchip shortage, according to AutoForecast Solutions.
Honda’s business in the U.S. market is especially susceptible to semiconductor shortages because Honda sells bigger, higher-end models there that require more chips, Fujimura said.
“Therefore, North America is more impacted by the shortage,” he said.
