Reply #10: Honda results disappoint

[ozymandius]

TOKYO (Reuters) -- Honda Motor Co. posted a smaller-than-expected rise in quarterly profit as fierce competition in China weighed on sales, and it left its operating profit forecast unchanged despite a big lift from a weaker yen.

The world's second-most valuable carmaker, with a market worth of $72 billion, had been riding demand for its small and fuel-efficient cars amid $3-a-gallon gasoline, but said it was feeling headwinds now with pump prices down at $2.20 to $2.30 a gallon.

The Tokyo-based automaker also said it had set its expectations too high for the booming Chinese market, and lowered its sales target there by about 20,000 units to around 360,000 vehicles for the business year to the end of March.

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Sales of Honda's (Charts) flagship Accord sedan have been badgered in China by the launch of Toyota Motor Corp.'s (Charts) popular Camry. Toyota, meanwhile, this month raised its sales growth outlook for China in 2007 to 40 percent from 33 percent.

http://money.cnn.com/2007/01/31/news/international/bc.honda.result.reut/index.htm?postversion=2007013106