Honda’s profits soar amid global auto recovery as electric vehicles (EV) shift surprises Japan with sales rising, favourable rates boosting earnings and focus on EV expansion.
Automakers worldwide experienced significant supply shortages from production delays caused by social restrictions related to the COVID-19 pandemic. These disruptions led to widespread challenges within the industry. As these social restrictions have begun to ease in various regions, production capabilities have started to recover, allowing manufacturing processes to resume and stabilise. This marks a positive turn for the global automotive industry after a difficult period.
In the latest quarter, auto sales in Japan remained stable compared to the previous year. The concern over climate change has prompted a major shift towards electric vehicles, benefiting newcomers like Tesla and BYD and surprising some Japanese manufacturers still focused on hybrids and traditional gasoline models. Honda is targeting growth in the U.S. EV market and has recently joined six other firms in developing a high-powered charging network across North America.
Honda reported selling 901,000 vehicles in the latest quarter, an increase from 815,000 the previous year, and worldwide motorcycle sales grew to nearly 4.5 million from 4.2 million. An impact of currency exchange rates added 23 billion yen ($160 million) to its quarterly operating profit, with a weaker yen (trading at about 143 to the U.S. dollar) benefiting Japanese exporters by increasing overseas earnings when converted to yen. Honda maintained its full-year profit projection at 800 billion yen ($5.6 billion), up from 651 billion yen the year before.
Honda announced that its profit for April-June more than doubled, driven by robust sales of motorcycles and cars and aided by favourable exchange rates. The fiscal first-quarter profit reached 363 billion yen ($2.5 billion), up from 149 billion yen, with quarterly sales surging 21% to 4.6 trillion yen ($32 billion). Honda’s financial service division also saw increased sales. The maker of the Fit subcompact, Honda e electric car, and Gold Wing motorcycle, Honda, reported improved profitability, particularly in North America, where production rebounded.
