Auto sales going strong for Japanese

Honda Motor Co.'s net profit in the January-March quarter plunged 86 percent compared with the same period a year ago because of a corporate tax levied on its Chinese joint venture, at 25.4 billion yen ($244.2 million). Quarterly sales edged down 1 percent to 3.056 trillion yen ($29.4 billion).

The Tokyo Regional Taxation Bureau demanded additional taxes from Honda, saying it had not been taxed adequately for its Chinese joint ventures over a five-year span ended March 2006.

Honda, Japan's second-biggest automaker, said it believes it has been abiding by law and paid appropriate taxes in China, but no agreement could be reached with the tax authorities.

Meanwhile, Mitsubishi Motors Corp.'s profit for the latest quarter dropped 37 percent 13 billion yen ($125 million), despite a 12 percent improvement in quarterly sales to 734.8 billion yen ($7.07 billion).

Mitsubishi blamed the drop in earnings on the closing of its Australian factory in the southern city of Adelaide earlier this year. It had operated the plant for 28 years.

Mazda Motor Corp., based in Hiroshima, was an exception in reporting a 48 percent jump in profit for the January-March period on strong overseas sales, especially in Europe, on way to a record annual profit for the one bright spot in the Ford family of automakers.

The Japanese affiliate of Ford Motor Co. of the U.S. reported a 46.8 billion yen ($450 million) profit for the quarter through March, and a rise in quarterly sales of 1.2 percent to 969.5 billion yen ($9.3 billion), partly on strong demand for the Mazda 6 in Europe.

The recent rise in oil prices have prove a boon for Japanese automakers because of their reputation for small cars delivering good mileage.

All three Japanese automakers that reported earnings Friday saw global sales grow during the fiscal year through March, underlining the popularity of Japanese cars around the world.