http://blog.castsoftware.com/wp-content/uploads/2011/08/honda-software-failure.jpg

A political issue can highly affect the demand of certain products. Rupinder Ahluwalia’s blogpost, Honda Forecasts a drop in yearly net Profit, summarized the political problem between China and Japan currently has that greatly reduced the demand of Japanese products. The dispute over islands in the East China Sea has aroused some protests in Japan. Many businesses were forced to shut-down for a period of time, causing a declining demand in goods from Japan. Many of the car companies’ sales dropped, and Honda’s drop in sales was considered the largest – 40.5% drop. Shares of Honda also dropped greatly to a 9-months low – “dropped nearly 6 percent on Monday, and last traded down 4.3 percent at 2,408 yen.” (cit: yahoo).

The support of the citizen in China can be greatly seen by their huge decline in buying Japanese products. As we can see, forecasting is very difficult. Political events, as such, can also greatly intervene the operation and sales of businesses. From this, I agree to Rupinder that many external factors and unexpected factors, such as natural disasters, are what make forecasting hard.

Information From: https://blogs.ubc.ca/rup02/2012/10/29/honda-forecasts-drop-in-yearly-net-profits/ (Rupinder Ahluwalia’s blog)

http://sg.finance.yahoo.com/news/honda-slashes-net-profit-forecast-031712823.html (Yahoo)