Honda cuts outlook for second time over chips

Honda has cut its outlook for a second time.

On Friday (November 5) Japan's number two carmaker said it now expects a full-year operating profit of $5.8 billion.

That's 15% down from its last forecast in August, and below analyst expectations.

The global chip shortage is largely to blame.

Honda Executive Vice President Seiji Kuraishi says the problem is more persistent than expected:

"We had originally expected the supply of semiconductors would recover from the third quarter, but unfortunately, the impact of the lockdowns in Asia have been prolonged. Although we expect a recovery from the beginning of next year, it will be difficult to recover during the current term."

In September, Honda's output was 30% down on last year as a result of the shortages.

It now expects to sell 4.2 million vehicles this year, down from 4.85 million in earlier plans.

The firm is also grappling with rising costs for raw materials, including steel.

However, Honda says none of the problems will affect plans to accelerate a shift away from traditional engines.

It aims to produce only zero-emission vehicles by 2040.

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