TOKYO (AP) – Honda reported on Wednesday that its April-June profit more than doubled on healthy sales of its motorcycles and cars, as the Japanese company also received a perk from favourable exchange rates.
Honda Motor Co said its fiscal first quarter profit totalled JPY363 billion (USD2.5 billion), up from JPY149 billion.
Quarterly sales jumped 21 per cent to JPY4.6 trillion (USD32 billion). Honda’s financial service division also reported growing sales.
Honda, which makes the Fit subcompact, Honda e electric car and Gold Wing motorcycle, said its profitability improved, especially in North America, where production recovered.
Automakers around the world were slammed by supply shortages because of production delays related to social restrictions caused by the COVID-19 pandemic. But such restrictions have eased, allowing production to pick up again.
Auto sales were about the same in Japan in the latest quarter as in the previous year, while dropping significantly in China because of intense competition from makers of battery electric vehicles (EVs), Honda said.
Honda is banking on growth in EVs in the United States market, where it recently announced it is joining six other companies in the creation of a high-powered charging network across North America.
Worries about climate change have helped set off a dramatic shift in the auto industry toward battery EVs, allowing for relative newcomers like Tesla and BYD to prosper, while catching some Japanese makers off guard with their hybrids and regular gasoline-powered models.
Honda said a computer chip shortage crimped its motorcycle sales in India, while sales rebounded in Indonesia as production recovered.
Honda said it sold 901,000 vehicles in the latest quarter, up from 815,000 a year earlier. It also sold more motorcycles worldwide at nearly 4.5 million, up from 4.2 million.
Honda added JPY23 billion (USD160 million) to its quarterly operating profit because of the impact of currency exchange rates.
A weaker yen, trading lately at about JPY143 to the US dollar, is a boon for Japanese exporters by boosting the amount of its overseas earnings when converted into yen.
Honda stuck to its full year projection of an JPY800 billion (USD5.6 billion) profit, up from JPY651 billion a year earlier.
Honda shares slipped 0.9 per cent on the Tokyo Stock Exchange.