In the most recent quarter, Honda’s operating profit increased by 78% as improved semiconductor supply fueled North American production and increased sales for the Japanese manufacturer.
Honda reported its financial results on August 9, citing that in the company’s fiscal first quarter, operating profit increased to $2.7 billion, up from $1.5 billion a year earlier. Additionally, global sales jumped 11% to 901,000 vehicles in the third quarter, while revenue increased 21% to $32 billion during the three-month period.
Deliveries in the U.S., Honda’s largest market, increased by 45 percent to 347,000 vehicles. However, sales in China decreased by 5% to 309,000 cars, and European sales decreased by 13% to 20,000 vehicles.
In response to the auto industry’s recovery from the global semiconductor shortage, Honda attributed the U.S. recovery to an increase in plant output. Masaharu Hirose, general manager of Honda’s finance division, stated, “In the U.S., the semiconductor supply has improved, and our production has recovered accordingly.”
Hirose claimed that the American economy is still in “good shape” and that overall demand outpaces supply. Nevertheless, he further predicted signs of weakness, such as a drop in household savings rates in the U.S. and a gradual rise in late loan payments.
Conversely, Honda’s operations in China suffered from increased price competition in that nation’s quickly growing E.V. market. The automaker produced 767,121 vehicles in North America through June, a 27% increase. At the same time, manufacturing fell by 12% to 617,638 cars in China.