Honda slashes its profit forecast

Japanese carmaker Honda has cut its annual profit forecast by 62% amid falling global car demand and the soaring yen.

The second-largest carmaker in Japan now expects 185bn yen ($2.1bn, £1.4bn) in net profit for the year to the end of March 2009.

In the previous financial year, Honda made a net profit of 600bn yen.

The yen has jumped to a 13-year high against the dollar, hurting carmakers among other Japanese exporters.

Carmakers around the world have been announcing output and job cuts, and leading US carmakers have been trying to persuade the government to approve a car industry bail-out.

In recent weeks, Honda has announced further cuts in production in Japan and Europe.

So far, the firm reduced its global annual output by about 200,000 vehicles due to the economic downturn.

Honda has also said it was pulling out of Formula One, blaming the world economic crisis for plans to sell its team.

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