According to Bloomberg, Honda expects its profits to hit another record this fiscal year, thanks to strong demand for hybrids and two-wheelers in the United States and Asia.
In the fiscal year to the end of March, Honda’s revenue was 20.
43 trillion yen, up 20.
8% from a year earlier.
operating profit reached 1.
38 trillion yen, up 77% from the previous fiscal year, a record high.
operating profit margin was 6.8%. net profit belonging to the parent company was 1.
11 trillion yen, up 70% from the same period a year earlier.
Among them, the company’s operating profit rose more than fivefold to 305.
6 billion yen in the January-March period.
Honda said its operating profit for the fiscal year to the end of March 2025 is expected to reach 1.
42 trillion yen, basically in line with the market consensus of 1.
43 trillion yen and up from its February forecast of 1.
25 trillion yen.
“Honda’s forecast is conservative and is likely to be raised again,” said Tatsuo Yoshida, an analyst at Bloomberg Bloomberg Intelligence.
In addition, Honda plans to spend 1.
19 trillion yen on research and development this fiscal year, 23% higher than in the previous fiscal year.
In addition, Honda announced plans to buy back up to 300 billion yen, or 3.
7% of its shares, the largest buyback plan in the company’s history.
Japanese companies such as Honda have been under pressure to raise dividends, but the company says it is a management priority.
Honda, like its Japanese counterparts, has benefited from a surge in demand for hybrid vehicles as rising interest rates and reduced subsidies have put some pressure on sales of electric vehicles.
Honda said it expects to sell 1 million hybrids this year and that hybrids will continue to bring profits to the company even if it has more and more electric vehicles.
Honda CEO Mibe Toshihiro said at a news conference, “our goal is to produce 2 million hybrids a year by 2030 and use this money for electrification.
” The hybrid is our initial weapon and will continue to be used in our business.
” Honda is trying to catch up with its competitors in the global electrification process and plans to spend 15 billion Canadian dollars (US $11 billion) to build an electric vehicle supply chain in Canada.
The company also plans to start producing pure electric vehicles in Marysville, Ohio, next year, and hopes to account for 100 per cent of electric vehicle sales by 2040.
Mibe said the recent slowdown in electric vehicle sales would not affect its plans.
In March, Honda teamed up with rival Nissan to work on core technologies for pure electric vehicles, including software.
Mibe said it had frequent discussions with Nissan chief executive Makoto Uchida about co-production of electric car parts, and that an agreement should be reached soon and an update would be announced soon.
Photo: Honda China, in the Chinese market, Japanese automakers face greater difficulties due to fierce competition from local electric car manufacturers.
Honda will launch a number of competitive electric models in China this fiscal year and work with joint venture partners to address the problem of overcapacity, said Shinji Aoyama, Honda’s vice president.
In April this year, Honda officially launched its new electric brand “Ye” in China, and its three new models, “Ye S7”, “Ye P7” and “Ye GT CONCEPT”, made their global debut.
Among them, the first two models will go on sale at the end of 2024.
Honda plans to offer 10 electric models in the Chinese market by 2027.
The recent weakness in the yen is also a boon for Japanese manufacturers, but Eiji Fujimura, Honda’s chief financial officer, said volatility was “not good” for the company.
If domestic demand increases, Honda could shift more production to Japan, and Japanese companies could theoretically boost demand for the yen by shifting manufacturing back to Japan, Fujimura said.
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