Honda’s profit slips, but sales remain strong

Honda Motor Co. reported Wednesday that fiscal second-quarter profit slipped 4.3% but that sales were strong especially in North America and Asia, where demand for fuelefficient cars has been growing.

Honda, Japan’s No. 3 automaker, posted a group profit of 127.9 billion yen ($1.1 billion) for the July-to-September period, down from 133.7 billion yen a year earlier.

Quarterly sales jumped 12.5% to 2.6 trillion yen ($21.8 billion), the Tokyo-based company said, helping make up for soaring raw material costs and research costs.

Honda -- which makes robots and motorcycles as well as the Accord mid-size car, the Odyssey minivan and the Civic small car -- said the profit drop was partly caused by expenses for hedging interest rates and foreign exchange fluctuations.

The strong sales news from Honda comes at a time when U.S. giants General Motors Corp. and Ford Motor Co. are seeing market share eroded by Honda and its larger Japanese rivals, Toyota Motor Corp. and Nissan Motor Co., amid soaring gasoline prices.

For the second quarter, North American vehicle sales climbed 4.3% to 411,000 units as drivers seeking good mileage snatched up small Honda models such as the Fit and the Civic.