Honda Motor outlook upped to positive on hopes of continued steady growth

Honda Motor outlook upped to positive on hopes of continued steady growth - S&P

	Published : Wed, 17 Oct 2007 09:29 By : Agencies Print this Story

MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services revised to positive from stable its outlook on Japan-based automaker Honda Motor Co Ltd and its related entities, citing expectations that Honda will be able to continue to steadily grow and strengthen its business profile in major global markets in the medium term, while maintaining a minimal financial risk profile.

At the same time, S&P affirmed its 'A+' long-term and 'A-1' short-term corporate credit ratings on Honda and the related entities, as well as its 'A+' long-term and 'A-1' short-term debt ratings on the related entities.

The related entities are American Honda Finance Corp and Honda International Finance BV.

S&P said increasingly high competitive pressure, high raw material costs, foreign exchange rate fluctuations and increasing economic uncertainty in major markets are common challenges for global automakers.

In addition, it said Honda's strengths are partially offset by the company's highly disproportionate reliance on earnings from North America, exposure to fluctuations in foreign exchange rates as a result of its high proportion of overseas sales, and weak market position in the Japanese domestic market amid the soft demand in the country.

'As a result, S&P recognizes the possibility of a slowdown in the pace of Honda's growth over the next few years, particularly due to increasing economic uncertainty in North America,' the agency said.

However it added it believes that Honda has been steadily improving its resilience to any future downturns in its operating environment.

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Honda Motor outlook upped to positive on hopes of continued steady growth - S&P