Japan’s Honda Motor Company forecasts a 2.8% increase in its operating profit for this financial year based on surpassing expectations by analysts in the fourth quarter mainly due to strong sales in the US, which offset China’s decline.
It projects full-year operating profit of 1.42 trillion yen (USD 9.13 billion), compared with an average estimate of 1.39 trillion yen from a poll of 22 analysts conducted by LSEG, making it Japan’s second largest automaker by volume.
Operating profit for the three months ending March 31 jumped more than five times from a year ago to 305.6 billion yen beating out estimates from nine analysts who predicted on average 248.3 billion yen. Its best performing market, the United States recorded a sales rally of around 17% or nearly 378k vehicles during this period. Meanwhile, sales dropped over six percent to about 207,000 units between January and March in China alone.
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In China, the world’s biggest car market; Honda and other Japanese carmakers have been facing obstacles created by nimble local rivals that have been luring Chinese customers with low-cost electric cars loaded with advanced features.
Although Honda came a bit late to the electric vehicle market, its announcement last month to set up an EV manufacturing hub in Ontario, Canada, and six vehicles directly under the brand name “Ye” to be launched in China by 2027 gives away the fact that Honda is very serious about making EVs. Such strategic actions signify that Honda is really endeavoring to grow its car-share in the emerging electric vehicle market.