Honda reports 41 percent drop in quarterly profit

Unlike inept run American car companies that lose money, the Japanese and German companies, for the most part still make a profit in this bad economy. Honda reported a 41 percent drop in quarterly profit (but a profit nonetheless) Tuesday on declining sales and a stronger yen, forcing Japan's second-biggest automaker to lower its forecasts for the full year.

Honda Motor Co., with its fuel efficient Civic and Accord models, has avoided the deep problems of its money-losing American rivals. But the latest results show that even Honda appears to be suffering some from a global slowdown sparked by the U.S. financial crisis. Particularly damaging has been the sluggish North American auto market, which has shrunk to its smallest in more than 15 years amid tighter credit and fears about bank failures and a Wall Street meltdown.

Honda Motor Co. reported a July-September group net profit of 123.3 billion yen ($1.3 billion), down from 208.4 billion yen. Sales for the second quarter fell 4.9 percent to 2.827 trillion yen ($30.4 billion).