Honda Reports 23% Q1 Profit Increase Despite Headwinds In China

Honda announced record quarterly net profits on Wednesday, overcoming weakness in China with the help of robust sales of hybrid vehicles in the US and Japan and a declining yen. The company reported that while sales increased 16.9% to 5.4 trillion yen, net profit increased 8.7% to 394.6 billion yen (US$2.4 billion) in April–June.
Nonetheless, with sales of 20.3 trillion yen, Japan's second-largest carmaker stuck to its yearly net profit goal of 1.0 trillion yen. Honda reported strong car sales for the quarter, attributed in part to domestic and US price hikes for hybrid models.

Nevertheless, soft sales in China—where the company reported heightened competition—caused a decline in overall vehicle unit sales. Sales of motorcycles increased globally, primarily in Brazil and India, while sales in Thailand decreased.

Honda announced in May that it intended to increase its investment in electric vehicles by double, to US$65 billion by 2030, with the goal of going completely electric within ten years.

The company announced last week that Mitsubishi would also be joining Nissan, having joined Nissan in March with the intention of working together on EVs to deal with the once-in-a-century upheaval in the auto industry.

According to analysts, the partnership was made to close the gap with Chinese EV rivals, as Beijing-backed automakers like BYD continue to outpace international rivals.

The biggest carmaker in the world by sales and Honda's competitor, Toyota, revealed last week a slight increase in net profits despite a decline in Japanese production and sales due to cost reductions and a weaker yen.