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Honda Reports More Than Double Profit in Q1 Amid Turnaround Efforts
TOKYO – Honda Motor Co. announced a strong financial performance for the first quarter of its fiscal year, with profits more than doubling compared to the same period last year. The Tokyo-based automaker posted a net profit of 456.9 billion yen ($2.9 billion) for April through June, up significantly from 196.6 billion yen a year earlier.
The company’s sales rose 13.5% to 6.06 trillion yen ($38 billion), driven by robust vehicle demand in key markets such as the United States and India. Honda, known for models like the Accord sedan, Fit subcompact, and Super Cub motorcycle, has been working to recover from its first-ever annual loss reported last fiscal year.
That previous loss of 423.9 billion yen ($2.7 billion) was largely attributed to costly investments in electric vehicle (EV) development, which fell short of expectations. The company faced challenges partly due to shifts in U.S. policies under the Trump administration, including reduced incentives for EV buyers and stalled funding for EV charging infrastructure. Additionally, tariffs on imported vehicles and parts, even after being lowered from 25% to 15%, negatively impacted Honda’s profitability.
Despite these hurdles, Honda’s motorcycle segment performed very well this quarter, particularly in markets like Brazil and India. Car sales also showed growth in Japan and the U.S., although sales remained weak in China. CFO Masao Kawaguchi noted that Honda is adapting its product lineup to better suit Chinese consumers’ preferences, a process that could take another year or two.
Favorable currency exchange rates also contributed to Honda’s improved results. Although recent joint interventions by the U.S. and Japan have strengthened the yen somewhat, the dollar remained strong during the quarter, benefiting Japanese exporters by increasing the yen value of overseas earnings.
Honda has raised its full-year profit forecast to 400 billion yen ($2.5 billion), up from an earlier estimate of 260 billion yen ($1.6 billion), signaling confidence in its ongoing recovery.
The automaker, along with other Japanese manufacturers, has experienced some disruption due to a 7.1 magnitude earthquake in Kumamoto Prefecture last week, which temporarily halted some production lines and affected supply chains. Honda officials expressed hope that operations will return to normal after the upcoming summer break.
Following the earnings announcement, Honda’s shares rose 3.9% in Tokyo trading.
- Yuri Kageyama, Associated Press