AUTOS

Honda reports quarterly loss due to strong yen, air bag recall

The Associated Press Published Friday, May 13, 2016 4:53AM EDT

A man walks past a Honda on display at Honda Motor Co. headquarters in Tokyo on April 25, 2014. (AP / Koji Sasahara)

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TOKYO - Honda Motor Co. is reporting a 93.4 billion yen ($860 million) loss for January-March, as the Japanese automaker is hit by costs for a massive air-bag recall and an unfavourable shift in exchange rates.

Tokyo-based Honda reported an 81.9 billion yen profit in the same quarter of 2015.

Honda is the biggest customer of Japanese air-bag maker Takata Corp., which is recalling millions of defective air-bags whose inflators can explode with too much force.

Honda said Friday quarterly sales rose 5 per cent to 3.66 trillion yen ($34 billion) as vehicle sales grew.

For the fiscal year ended March 2016, Honda's profit plunged 32 per cent to 344.5 billion yen ($3.2 billion) as quality-related expenses and the strong yen offset gains from cost cuts and strong performance in the North American market.