Honda has enough cash...for now

By REUTERS | 12 May 2020

TOKYO: Honda Motor Co posted its lowest operating profit in four years as the coronavirus (Covid-19) pandemic continues to batter global car demand.

The Japanese carmaker's operating profit for the year ended in March fell 13% to 634 billion yen ($5.9 billion) - off its estimated 669 billion yen profit.

The Japanese brand, as well as other global automakers, have begun to gradually resume operations at their vehicle plants, but face weak demand as job losses and concern about a global economic downturn weigh on consumer spending.

Carmakers are also trying to cope with supply chain disruptions and social distancing measures that are expected to limit output in the coming months.

Whispers on the interweb indicate that global vehicle sales could drop by as much as 33% with Honda having just declared an 8.5% decline already.

However, the Japanese carmaker said that it has enough cash that's equivalent to almost two months of sales to weather the downturn caused by the Covid-19 virus.

Beyond that, if a second or third wave of infections were to come about, the company may resort to issuing bonds to raise funds.