Japanese automaker Honda Motor increased its net profit in the first fiscal half by nearly two-thirds to 516.8 billion yen. The company announced the results today in its earnings report. At the same time, it raised its full-year net profit forecast to 500 billion yen, up from the previously projected 400 billion yen. According to the automaker,the improved outlook is driven by price hikes, a weaker domestic currency, and cost-cutting measures.
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U.S. Hybrid Demand Fuels North American Growth and $3B Ohio Plant
Revenue for the first fiscal half ended September 30 rose by approximately 13 percent year-on-year to more than 12 trillion yen. However, total vehicle sales dropped by nearly seven percent to 1.57 million units. In addition, the automaker lowered its full-year sales forecast to 3.16 million vehicles from the previous estimate of 3.39 million.
In North America, Honda’s half-year sales rose by five percent to 897,000 vehicles, buoyed by robust demand for hybrid cars in the United States. On Monday, the company announced that it will build a $3 billion hybrid vehicle manufacturing plant in Ohio. The annual production capacity of the new facility is expected to reach 240,000 vehicles.
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Rebounding from Historic Loss and Costly EV Restructuring
In the previous fiscal year, Honda posted a loss of roughly 424 billion yen, marking its first full-year net loss since 1957.The company’s performance was heavily impacted by extensive one-off costs tied to the restructuring of its electric vehicle production.
Honda is Japan’s second-largest automaker behind rival Toyota Motor. Last week, Toyota reported a 26 percent year-on-year increase in net profit for its first fiscal half, reaching 2.26 trillion yen.
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Source: Reuters
