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Honda Reports 2.1% Hike in Global Production in January

Zacks Equity Research

Share price of Honda Motor Co., Ltd.’s HMC decreased 0.9% to $30.97 after the company reported decline in export from Japan in Jan 2017. Exports from the country decreased 52% year over year to 4,904 units. However, the company recorded worldwide production volume of 412,723 units, up 2.1% year over year from Jan 2016.

In fact, production outside Japan was also up 2.2% with 349,834 units, reflecting growth for the sixth consecutive month. All these positives resulted in record high production for the month of January. Additionally, production in Japan rose 1.7% to 62,889 units in the same month, which marked the third continuous month of year over year increase.

The improvement in production outside Japan resulted from a 4.3% rise in Asia to 163,774 units, 40.7% rise in Europe to 15,305 units and a 1.7% improvement in other regions to 12,362 units. Also, production in China increased 6.9% to 102,444 units. However, these positives were partially offset by a 2.4% fall in production in North America to 158,393 units and production in US declined 3% to 102,632 units.

Sales in the Japanese market increased 16.2% year over year to 59,512 units in January, marking the fifth continuous month of increase. While, new vehicle registrations went up 14.3% to 30,337 units, mini vehicles’ sales rose 18.3% to 29,175 units.

The Honda FREED, which recorded sales of 9,029 units, was the sixth best-selling vehicle in the industry among new vehicle registrations (excluding mini vehicles) in Jan 2017.  In the Mini vehicles category (under 660cc), N-BOX was the best-selling vehicle, with sales of 17,641 units. N-WGN was the seventh best-selling vehicle in the industry, recording sales of 6,808 units.

Honda Motor Company, Ltd. Price

Honda Motor Company, Ltd. Price | Honda Motor Company, Ltd. Quote

Price Performance

The performance of Honda’s shares has been better than the Zacks categorized Auto Manufacturers-Foreign industry over the last three months. While, the company’s shares have rallied 5.4%, the industry lost 0.5%. The performance of the company’s shares was due to better-than-expected earnings in the last reported quarter.

Zacks Rank & Key Picks

Honda currently sports a Zacks Rank #1 (Strong Buy).

Other favourably-ranked companies in the auto space include Lear Corporation LEA, American Axle & Manufacturing Holdings, Inc. AXL and General Motors Company GM. All these stocks also sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

For the current year, Lear Corporation, American Axle and General Motors expect earnings growth of around 8.9%, 8.1% and 9.4%, respectively.  

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