Honda posts strong first quarter on Asia sales, raises annual profit forecast

Honda posts strong first quarter on Asia sales, raises annual profit forecast”

The situation has been made worse by an overall decline in demand across the auto market in the U.S, which is the second largest in the world trailing just China, following a number of growth years that increased profits following the worldwide financial crisis.

Consolidated sales revenue for the quarter amounted to 3.713 trillion yen or $33.153 billion, an increase of 7.0% from the same period previous year, due primarily to increased revenue in financial services business and motorcycle business operations as well as favorable foreign currency translation effects.

The automaker is expecting weakness to remain in the auto market across North America and kept its 2.5% drop in annual sales forecast in place for the region.

Civic sedans and the XR-V SUV compact model were China's top seller for Honda. The country accounted for around 65 percent of all of Honda's Asian sales. It now expects the USA dollar to average around ¥107 through March, from a previous forecast of ¥105 yen.

Consolidated operating profit for the fiscal first quarter (April 1, 2017 through June 30, 2017) amounted to 269.2 billion yen, an increase of 0.9% compared to the same period a year ago, due to profit-increasing factors such as an increase in profit related to changes in sales volume and model mix and cost reduction efforts.

For the year to March, Honda now expects an operating profit of 725 billion yen ($6.57 billion), versus 705 billion yen forecast earlier, based on the US dollar averaging around 107 yen JPY= instead of 105 yen as expected previously. This offset a 7.6 percent slide in North American vehicle sales to 480,000 units.

A softer yen makes exports from Japan cheaper, while also increasing the value of overseas proceeds when converted to the home currency.

Its ratio of light truck to passenger vehicle sales in January-June was 51 percent to 49 percent, according to Autodata. A pricing war in the market could undermine automakers' profits.

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