Honda Posts Record Profits Fueled by Sales Surge and Favorable Exchange Rates

Honda saw a 70% profit surge for the fiscal year through March, thanks to increased vehicle sales and a beneficial yen exchange rate. Despite strong demand in the US and Europe, weaker sales in China were offset. Honda predicts a 10% profit decline for this fiscal year due to increased R&D spending as Japanese automakers invest in electrification amid the global shift to electric vehicles.

Honda's profit for the fiscal year through March jumped 70 per cent as vehicle sales grew and a weak yen buoyed overseas earnings, the Japanese automaker reported Friday.

Annual profit at Tokyo-based Honda Motor Co. totalled 1.1 trillion yen (USD 7 billion) as sales surged nearly 21 per cent to 20.4 billion yen (USD 131 million).

Weaker sales in China were offset by strong demand in the US market.

Honda sold more than 2.8 million vehicles globally, up from 2.3 million a year earlier, with sales growing in Japan, the US and Europe.

The maker of the Accord sedan and CR Electric Proto motorcycles was less optimistic about this fiscal year, forecasting that its profit will decline nearly 10 per cent to 1 trillion yen (USD 6.4 billion), as research and development spending was expected to increase to nearly 1.2 trillion yen (USD 7.7 billion) from 964 billion yen.

All the Japanese automakers are investing in R&D, given the global shift to electric vehicles, using the profit gains they have racked up lately thanks to the blessings of a weak yen to invest in the future.

The US dollar has been trading at about 155 Japanese yen, up from 130-yen levels a year ago.

Honda's Japanese rivals Toyota Motor Corp. and Nissan Motor Co., which both reported earnings earlier, racked up robust increases in profit, but also stressed they were investing in research.

Honda Chief Executive Toshihiro Mibe told reporters there was "anxiety due to uncertainty about electrification" at the company, despite its latest robust profits.

Japanese automakers have scored great success with traditional fuel-powered vehicles and hybrids, which have both a gas engine and electric motor.

But they have lagged rivals such as BYD of China and Tesla of the US in the drive toward battery electric vehicles.

Honda said it would make the current fiscal year a major electrification year to ensure future growth. A strategy will be outlined next week, it said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)