Honda Motor, Japan’s second largest automaker, said Wednesday its profit soared almost seven-fold in the latest quarter from a year earlier, helped by increased sales in India and China.
The maker of the Insight hybrid and the Civic and Accord cars sharply hiked its earnings forecasts, offering another ray of hope for the battered sector.
Honda posted a better-than-expected net profit of 134.6 billion yen (1.5 billion dollars) for the fiscal third quarter through December, up from 20.2 billion yen in the same period of the previous year.
Along with robust sales in the rest of Asia, cost-cutting helped to boost the group’s bottom line, offsetting an 11.5 percent drop in revenue in the quarter to 2.24 trillion yen.
For the full financial year which ends next month, Honda raised its net profit projection to 265 billion yen from 155 billion, and its revenue target to 8.53 trillion yen from 8.45 trillion.
“It’s probably a bit too much to say the economy is on the recovery path, but I think it bottomed out,” said Honda vice president Koichi Kondo.
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Honda was the only one of Japan’s top three automakers to post a profit for the financial year to March 2009, outperforming Toyota and Nissan which suffered heavy losses.
Like other Japanese carmakers, Honda is pinning hopes on sales of fuel-efficient cars to help it recover from the fallout of the global downturn.
But Kondo warned that a drop in sales was expected due to the end of government incentives aimed at boosting sales of less-polluting cars.
“Globally, our biggest concern is some reaction from incentives in China and in South America… and also in Europe, including Britain where incentives just ended,” he said.
Honda suffered a setback last week when it recalled 646,000 vehicles worldwide due to a fire risk, in a fresh blow to Japanese makers’ reputation for quality after a series of massive recalls by world number one Toyota.
“We are certainly concerned that the recalls could damage consumer confidence in Japanese cars, but it’s hard to figure out the actual influence at this point,” Kondo said.
“Keeping high quality has been our first priority and we’ve been strengthening measures to avoid (recalls).”
Japan’s fourth-biggest automaker Mitsubishi Motors announced Wednesday a net loss of 25.7 billion yen for the nine months to December, hit by the economic downturn and a stronger yen against major currencies.
It posted an operating loss of 19.8 billion yen on revenue of 952.1 billion yen, down 43 percent from the same period a year earlier.
For the full financial year, Mitsubishi kept unchanged its forecasts for a net profit of five billion yen, an operating profit of 30 billion yen and revenue of 1.5 trillion yen.
