Published: Friday, May 10, 2020
Hond reported that its profit in the fiscal year up to March rose 70%, as vehicle sales increased and a weaker yen boosted overseas earnings.
By YURI KAGEYAMA, AP Business Writer
TOKYO – Honda’s profit in the fiscal year that ended March rose 70%, as sales of vehicles increased and the weaker yen boosted overseas earnings. The Japanese automaker announced this Friday.
Honda Motor Co., based in Tokyo, reported a profit of 1.1 trillion yen (7 billion dollars) for the year. Sales grew by nearly 21% and reached 20.4 billion yen (131 million dollars).
Strong demand on the U.S. Market offset weaker sales in China.
Honda sold over 2.8 million cars globally in the past year, an increase from 2.3 millions a year ago. Sales grew in Japan, America and Europe.
The Accord sedan maker and CR Electric Proto Motorcycles were less optimistic for this fiscal year. They forecasted that their profit would decline by nearly 10%, to 1 trillion yen (about $6 billion). However, they expected research and development expenditures to rise to almost 1.2 trillion yen (7.7 billion yen) from 964 bn yen.
The Japanese automakers have all invested in R&D due to the shift towards electric vehicles. They are using the profits they’ve made recently thanks to a weaker yen as a way to invest for the future.
The U.S. Dollar is currently trading at around 155 Japanese yens, up from 130 yens a year earlier.
Toyota Motor Corp. and Nissan Motor Co. both reported earlier earnings. Both companies saw a significant increase in profits, but they also said that they were investing more in research.
Toshihiro Mize, Honda’s Chief Executive Officer, told reporters that the company was experiencing “anxiety” due to the uncertainty surrounding electrification despite its recent robust profits.
Japanese automakers are enjoying great success in the market with their traditional gas-powered cars and hybrids that have a gas motor and an electric motor.
They have fallen behind rivals like BYD from China and Tesla in the U.S. when it comes to battery-electric vehicles.
Honda has announced that it will make this fiscal year an electrification-focused year in order to secure future growth. It said a strategy would be announced next week.
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Yuri Kageyama is on X: https://twitter.com/yurikageyama
Source: ABC News