Honda’s Q2 profit is up 16%, and the company raises its outlook as motorcycles and the yen help.
On Wednesday, Honda Motor Co. of Japan reported a 16% increase in its second-quarter profit and an improvement in its outlook for the full year. Better pricing, strong sales of motorcycles, and a weak yen helped the company get through a shortage of semiconductors.
Japanese automakers, like many of their foreign competitors, have been hurt by chip shortages and supply chain problems. Honda, on the other hand, has done well because its motorcycle business, especially in Asia, has been strong.
The company also said that its “increased product value” and the reduction of consumer incentives helped.
Related: Honda will start a business in China with Dongfeng and Guangzhou Auto to buy electric vehicle batteries.
The automaker raised its forecasts “to reflect our efforts to further improve profitability, higher car sales volume, and the impact of the yen’s depreciation,” Honda Executive Vice President Kohei Takeuchi said at a results briefing.
Still, he pointed out that there were many pressures, such as inflation.
Operating profit for the three months ending in September was 231.2 billion yen, or $1.59 billion. This was less than the average estimate of 243.3 billion yen from a poll of 10 analysts done by Refinitiv. The company made 198.9 billion yen during the same time last year.
Honda raised its operating profit forecast for the full year, which ends on March 31, from 830 billion yen to 870 billion yen. This was mostly due to the weak yen. This is compared to what 24 analysts had predicted, which was an average of 922.05 billion yen.
Because of COVID-19 outbreaks and a lack of semiconductors, the automaker had to cut production at two of its domestic factories on a regular basis. The company had trouble making its Vezel SUV, Stepwn minivan, and Civic compact car.
Related: Honda is thinking about separating its supply chain from China.
For the first six months of its financial year, it sold 6.1% fewer cars around the world than it did the year before, but 5.5% more in its own country.
($1 = 145.7500 yen)
