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Honda reports a 78% increase in Q1 earnings due to a significant surge in sales in the U.S. market.

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Honda’s Q1 Profit Surges by 78% Driven by Robust North American Sales and Weaker Yen

Honda news, On August 9th, Tokyo – Honda Motor (7267.T), a prominent Japanese automotive company, announced a remarkable 78% increase in its quarterly profit. This growth was primarily attributed to heightened sales, particularly in the North American market, alongside the impact of a depreciation in the yen’s value.

The second-largest car manufacturer in Japan in terms of sales revealed an operating profit of 394.4 billion yen ($2.76 billion) for the three-month period spanning June. This figure substantially outperformed expectations, surpassing the average estimate of 324.74 billion yen provided by a survey of 10 analysts conducted by Refinitiv.

Honda’s Q1 Performance: Surge in U.S. Sales Offsets China Decline, Profits Soar

In contrast to the 222.2 billion yen profit achieved in the same period the previous year, Honda news showcased a notable financial growth in the current quarter.

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Much like its counterparts in the automotive industry. Honda experienced a positive impact stemming from robust retail sales in the crucial U.S. market. The company achieved a remarkable 44.7% year-on-year surge, recording sales of 347,000 units. This increase is attributed to the gradual alleviation of post-pandemic supply disruptions in parts and chips.

However, a stark comparison emerges with the Chinese market, where Honda faced a significant challenge. Sales in China experienced a substantial decline of 5%, amounting to 309,000 vehicles during the quarter. This drop is attributed to intensifying local competition and the rapid transition. Towards electric vehicles in the world’s largest automobile market.

Honda Faces Deteriorating Business Landscape in China; Sales Projection Reevaluation Underway

The business environment in China has taken a turn for the worse for Honda in comparison to the time. When the company initially projected its sales target of 1.4 million vehicles for the entire year. A spokesperson from Honda acknowledged this shift.

“We continue to operate under constraints imposed by semiconductor shortages,” the spokesperson stated.

In the event of a potential revision to the sales forecast for China. Honda intends to explore the feasibility of enhancing part distribution and manufacturing in alternative regions.

Honda Sticks to 1 Trillion Yen Operating Profit Forecast; Considering Revision Amid Weakening Yen

For the ongoing fiscal year, Honda has maintained its projection of achieving a 1.0 trillion yen operating profit.Moreover, a figure below the average forecast of 1.117 trillion yen provided by 22 analysts.

The company is ready to evaluate the need for revising its full-year outlook. Taking into account potential advantages stemming from the devaluation of the yen. A decision regarding this revision is expected to coincide with the release of second-quarter. Results in early November, as noted by the company official.

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