Honda Motor Co., Japan’s second- largest carmaker, almost tripled its full-year profit forecast after government stimulus measures in the company’s largest markets boosted demand for fuel-efficient vehicles.
The automaker expects net income of 155 billion yen ($1.68 billion) in the year ending March, compared with an earlier forecast of 55 billion yen, it said in a statement today. Second-quarter profit totaled 54 billion yen, beating the 45 billion yen median of four analyst estimates compiled by Bloomberg.
Honda, Toyota Motor Corp. and Nissan Motor Co. have raised sales outlooks in markets including Japan and China as governments offer rebates and tax cuts for new, fuel-efficient cars to revive flagging demand. Honda’s sales may rise next year in North America, traditionally its most profitable market, Chief Executive Officer Takanobu Ito said last week.
“Honda’s hybrid models have been selling well with the incentives,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc. in Tokyo, which manages about 800 billion yen. “Whether or not real demand is picking up is still uncertain.”
Government incentives helped Tokyo-based Honda boost sales in Japan 15 percent last month, while sales in China jumped 27 percent. China’s overall passenger vehicle sales surged 84 percent for the month, passing 1 million for the first time.
The carmaker fell 1.9 percent to 2,845 yen at the 3 p.m. close of trading on the Tokyo Stock Exchange, before the earnings announcement.
Toyota Industries Corp. and Toyoda Gosei Co., which make parts for Toyota Motor, yesterday reported preliminary profits for the six months through September, scrapping previous loss forecasts. Toyota Motor, Japan’s biggest carmaker, reports second-quarter earnings on Nov. 5.
Honda’s second-quarter net income fell 56 percent from a year earlier as government incentives failed to make up for declining U.S. demand and a stronger yen, which reduced earnings from overseas sales.
The company’s U.S. vehicle sales fell 25 percent in the first nine month of the year. The yen averaged 13 percent higher against the dollar last quarter than a year earlier.
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