Japanese automaker Honda Motor on Tuesday increased its full-year operating profit forecast by 23% to 520 billion yen as demand in China and elsewhere gained momentum and trimmed costs.
The sales recovery led by China, the world’s biggest auto market, comes as driver demand for new models as electric vehicles and autonomous drive cars grows. The worldwide shortage of semiconductors, however, is forcing Honda and its global peers to trim vehicle production.
Honda’s recent profit forecast is up from the 420 billion yen profit it predicted three months ago and higher compared to an average 463.6 billion yen forecast from 21 analysts, Refinitiv data shows.
“Automobile sales results exceeded the same period last year since October due mainly to the launch of new N-ONE,” said Seiji Kuraishi, Honda’s COO, during a press briefing, referring to the automaker’s micro city car.
The Japanese automaker slashed production last month by about 4,000 units, mainly affecting its Fit and Jazz models, because of the semiconductor chip shortage. It also lowered the output of five models at five facilities in the United States and Canada. China’s GAC said its joint venture with the automaker had received warnings on the supply of particular models.
Honda said expects to sell 4.5 million cars worldwide in its business year to March 31 compared with an earlier forecast of 4.6 million vehicles
China, one of Honda’s biggest markets, increased by 6.4% in December as it continued to lead the industry’s recovery from the coronavirus crisis.
Honda is speeding up its shift to electric vehicles and other zero-emission vehicles, aiming for two-thirds of its output to be new-energy vehicles by 2030. Last year it introduced its first mass-produced all-battery car and also plans to start selling new autonomous drive vehicles.
The maker of the CR-V SUV crossover also published a better-than-expected 67% jump in operating profit for the three months to December 31 to 277.7 billion. That result was better than an estimated average of 176.72 billion yen from eight analysts surveyed by Refinitiv SmartEstimate.