Honda Reports Growth In Profit Despite Chip Shortages

(CTN NEWS) – TOKYO – Despite challenges like a lack of computer chips and increased raw material prices, Honda reported a 27% increase in its October-December profit.

The past quarter saw an increase in earnings for Tokyo-based Honda Motor Co., from 192.9 billion yen to 244.6 billion yen ($1.9 billion).

Honda’s global motorcycle sales increased by 20% year over year during the third quarter to 4.4 trillion yen ($33.5 billion), but vehicle sales barely moved.

According to the region, Honda sold more cars in Japan and the U.S. but fewer cars in China and other Asian nations.

All significant motorcycle markets, including Japan, North America, and the rest of Asia, particularly Indonesia, India, and Vietnam, saw increases in sales.

As concerns about the environment and climate change increase, Honda is pushing up its effort to sell more electric vehicles, joining other automakers, including Japanese rivals like Toyota Motor Corp.

30 EV vehicles will be introduced globally by 2030, according to the company that makes the Accord car, the Asimo robot, and the Gold Wing motorcycles.

Honda has a variety of models planned, ranging from compact vans to powerful sports cars. Particularly aggressive model offerings are made in China, where Honda is a well-known brand.

The corporation is also switching to electric motorcycles, launching these goods in Europe and China before going global.

According to Eiji Fujimura, in charge of accounting at Honda, the lack of computer chips and the disruptions brought on by the epidemic in China was detrimental to the company.

The bottom line of the world’s automakers has also been severely impacted by the conflict in Ukraine and other events that have driven up the cost of energy and raw materials.

Honda, however, expected favorable currency swings to boost its operating profit by 269 billion yen ($2 billion) for the entire fiscal year through March.

When converted into yen, the earnings of Japanese exporters like Honda are increased by a weak yen. A year ago, the US dollar was worth approximately 115 yen. Over the last year, it increased as high as 150 yen; currently, it sells at around 130 yen.

Honda maintained its full-year profit prediction of 725 billion yen ($5.5 billion), up from the previous fiscal year’s 707 billion profit.

From an earlier prediction of 4.1 million automobiles, it cut its forecast for vehicle sales to 3.85 million. 4.07 million Honda automobiles were sold during the preceding fiscal year.

Honda increased its expected sales of motorcycles for the fiscal year to 18.7 million, which is higher than the 17.7 million sold in the prior fiscal year and an earlier expectation of 18.43 million.

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