Last month’s earthquake and tsunami in Japan really took a toll on Honda’s production and profits. The Japanese automaker said today that its quarterly profit fell 38.3 percent due to reduction in car production following the March 11 earthquake and tsunami.
Honda’s net profit for the first quarter of 2011 fell to 44.5 billion yen ($545 billion). Revenue was down 2.9 percent to 2.21 trillion yen.
“The March quake was the biggest reason for declining profit. We simply could not produce cars due to parts shortages after the quake,” said Honda spokesman Tomohiro Okada.
Honda said it would cut all 600 contract workers at one of its two plants in Japan. Honda shut down its entire production in Japan from March 14 to April 10, which resulted in a production loss of 58,500 units. Honda said that its plants in Japan will operate at half capacity until the end of June. Full production is estimated to reach normal levels by the end of the year.
– By: Omar Rana
Source: Detroit News