Honda Motor on Friday more than doubled its full-year operating profit forecast as it reported second-quarter earnings increased 28% amid a recovery in China after auto sales were affected due to coronavirus crisis.
The automaker said it now forecasts a full-year operating profit of 420 billion yen ($4.06 billion) up from an earlier prediction of a 200 billion yen profit.
That was well above an average estimate for a 254.6 billion yen ($2.46 billion) yen profit compiled from 19 experts polled by Refinitiv.
For the second quarter, operating profit came in at 283 billion yen, up from 220 billion yen in the same period a year earlier.
The upgrade came after a similar move by Toyota Motor earlier on Friday. Honda and peers like Toyota are concentrating more on China, the world’s biggest auto market, as it leads to a recovery in global demand that was damaged by the coronavirus crisis.
For the whole business year, Honda said it expects to sell 4.6 million cars. That’s up from an earlier forecast of 4.5 million, but still below the 4.79 million sold during 2019.
Like other automakers, Honda is also speeding up a transition to electric cars and other zero-emission automobiles, a change in strategy that was behind its decision last month to put an end to its participation as an engine provider in the FIA Formula One World Championship.
Honda last month started its first mass-produced all-battery car this month – the Honda e – and wants two-thirds of its output to be new-energy automobiles by 2030.
In the United States, meanwhile, Honda is looking to gain a foothold in bigger market share with redesigned sports utility vehicles (SUVs) as it chases a transition in consumer demand for larger, all-wheel-drive models.
In September Honda revealed plans to deepen its partnership in North America with General Motors to jointly develop low-emission vehicles that would permit them to share technology and costs.
