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Last Updated: Wednesday, 25 October 2006, 07:43 GMT 08:43 UK
Honda profits slip but sales rise
Honda worker at the Swindon factory
Honda launched a $1.2bn expansion plan in May
Japanese carmaker Honda saw profits slip 4% in the third quarter, despite strong sales in Asia and the US.

Net profits for the three months to 30 September hit 128 billion yen ($1.1bn; 600m), down from 134 billion yen a year earlier.

The fall was mainly due to the 50 billion yen Honda lost hedging against changes in the value of the yen.

Japan's third-biggest carmaker relies heavily on exports and its profits can be hit by big currency fluctuations.

Honda's operating profit for the quarter rose nearly 19%, thanks to a 9.5% rise in overseas sales and the falling value of the yen against the US dollar, which makes its exports more valuable.

The company's range of fuel-efficient cars is helping it to win customers in Europe and the US, which it relies on for most of its profits.

Expansion plan

However, the company said car sales in Japan had fallen 6.6%.

Honda said it now expected its global car sales for the 2006/07 business year to reach 3.7 million, slightly less than the 3.72 million it forecast in April.

In May, the car giant unveiled sweeping expansion plans for new plants in Japan and North America.

The Tokyo-based group plans to pump more than $1.2bn (634m) into two new factories in Japan, one in the US and an engine plant in Canada.

It said the new plants would help Honda's plans to accelerate sales by 34% by 2010.

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