Honda aims to lower Japan cost structure

Honda Motor Co. aims to improve its cost structure to be able to break even in Japan using just 70% of its capacity to build cars, a top official at Japan’s second-biggest automaker said. Honda nearly tripled its annual operating profit forecast to ¥190 billion (US$2.1 billion), far above consensus projections and despite lowering its dollar rate assumption to a tougher ¥85 (US$.94) in the second half, from ¥90 (US$1). Its Japanese operations are expected to stay in the red, but Chief Financial Officer Yoichi Hojo said Honda was shaving costs on internally developed components and looking for cheaper sources of parts around the world, with the aim of erasing the losses even at the current depressed levels of production. (November 4, 2009)