Honda Motor increased its profit forecast for the year pointing out a more beneficial currency exchange rate, after posting an unexpected increase in quarterly revenues on the back of a weaker yen and strong demand in Asia.
Japan’s No. 3 automaker, however, is still having a hard time in its largest market, North America, that represent a third of its sales – where sedans, including Honda’s top sellers the Accord and the Civic, have fallen out of trend as drivers choose bigger models consisting of SUVs.
Making the scenario worse is a total slowdown in demand in the U.S. automobile market, the world’s second biggest following China, after years of growth that boosted revenues following the global monetary crisis.
Honda’s sales in North America skidded 5.7 percent in the first quarter ended June, but this was balanced out by a 15.5 percent jump in sales in Asia, including China – which the automaker expects will become its biggest market this year.
The Civic sedan and the XR-V compact SUV design were important sellers in China. The country represented around 65 percent of all of Honda’s Asian sales.
Honda’s operating profit in the quarter edged up 0.9 percent to 269.2 billion yen, against an estimate for a drop to 230.43 billion from 7 experts polled by Thomson Reuters.
For the year to March, Honda now hopes an operating revenue of 725 billion yen ($6.57 billion), against 705 billion yen that was anticipated earlier.