Honda posts 46% jump in second-quarter net profit

Article by Anita Panait, on November 1, 2013

Honda Motor Co. logged a 46-percent jump in net profit to JPY120.4 billion ($1.23 billion) in its fiscal second quarter ended September 2013, boosted by strong car sales in the United States. The Japanese carmaker reiterated its forecast of JPY580 billion in net profit for its full fiscal year ending March 2014. Honda logged a 13-percent surge in sales in the United States in the July-September period to 413,434 vehicles.

Honda posted a 9-percent sales growth for its Civic compact and a 14-percent gain for its Accord sedan. The Japanese carmaker was able to keep incentives low despite increasing sales. Honda’s average incentive spending per vehicle dropped 30 percent to $1,611 in the first nine months of 2013, the lowest among the six biggest carmakers in the US, according to market researcher Autodata.

Honda has been dealing with the high costs of expansion to build new sites and assembly lines as it bids to grow its global sales to 6 million vehicles by the end of March 2017, compared with 4.01 million in the year ended March 2013. In July, the carmaker commenced operations of its new Yorii plant near Tokyo, where it will start building the redesigned Fit subcompact in November.

Honda logged a 40-percent year-on-year jump in sales in September 2013 to 74,779 vehicles. Honda is among the Japanese exporters benefiting from the so-called Abenomics that have helped weaken the yen. A weaker yen boosts the value of repatriated earnings and is providing Japanese carmakers an edge over foreign rivals. The yen has depreciated around 12 percent against the dollar in 2013. [source: Honda]

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