Honda cuts profit forecast

TOKYO, Jan 30 (AFP) : Honda cut its full-year profit forecast on Friday as the Japanese automaker grapples with soaring recall costs, including from an exploding airbag crisis linked to at least five deaths.

The downgrade came after Honda said it was probing a fatal crash in the United States that may have been caused by a defect in airbags made by embattled supplier Takata, which has sparked the recall of millions of vehicles worldwide by 10 major automakers.

Honda, Japan's third-biggest automaker, said Friday it was cutting its fiscal year to March net profit forecast by 3.5 per cent to 545 billion yen ($4.6 billion), citing "quality-related expenses" as well as falling demand in Japan and the world's biggest vehicle market, China.

It blamed the move on a "decline in unit sales in Japan and China due to the difficult automobile market environment and a forecast increase in quality-related expenses, mainly in North America".