Honda has reported a significant jump in profits for the first quarter of the fiscal year, more than doubling compared to the same period last year. The Japanese automaker, based in Tokyo, announced on Wednesday that its profits for April to June reached 456.9 billion yen (around $2.9 billion), up from 196.6 billion yen a year earlier.
Sales also saw an increase of 13.5%, totaling 6.06 trillion yen (approximately $38 billion). This growth is attributed to strong vehicle sales in the U.S. and India, where popular models like the Accord, Fit, and Super Cub motorcycle have been well received.
Last fiscal year, Honda faced a loss of 423.9 billion yen (about $2.7 billion) due to high costs related to its electric vehicle (EV) plans, which didn’t meet initial expectations. Analysts noted that many consumers were still hesitant to switch to electric. As a result, Honda has scaled back its EV model plans.
The financial impact from U.S. policies under the previous administration, including reduced incentives for EV adoption and tariffs on imported vehicles, also played a role in Honda’s profitability issues. For the latest quarter, strong performance in Honda’s motorcycle segment, particularly in Brazil and India, helped boost overall results. However, car sales struggled in China.
Honda’s Chief Financial Officer, Masao Kawaguchi, stated that the company is focusing on creating models that better suit Chinese consumers, an effort that may take one to two more years to fully implement.
Despite some challenges, Honda’s quarterly results were positive, aided by a favorable exchange rate. Even with a slight increase in the yen’s value due to recent interventions, the strong dollar compared to last year benefited the company’s profits when they were converted back to yen.
Looking ahead, Honda has revised its profit forecast for the fiscal year upward, now expecting around 400 billion yen (approximately $2.5 billion), an increase from its earlier estimate of 260 billion yen (about $1.6 billion).
However, all Japanese automakers, including Honda, have recently been affected by a 7.1 magnitude earthquake in Kumamoto, Japan, which temporarily halted some production lines and disrupted supply chains. Honda is planning a summer break later this month and hopes operations will return to normal upon their return.
Following the financial news, Honda’s shares rose by 3.9% during trading in Tokyo.
