Strong China sales help Honda boost profits 19%
Honda Motor Co. boosted global quarterly profits by 19 percent as sales gains in China overshadowed a rise in recall-related expenses.
Net income totaled 186 billion yen (9.3 billion yuan) in the quarter ended June, up from 156 billion yen a year earlier, the company said Friday.
Honda and other Japanese carmakers have bucked a slowdown in China this year. The carmaker boosted China sales by 30 percent in the first six months as it introduced new compact and crossover models. Its performance in China helped Honda partly offset slumping sales in Japan and Southeast Asia.
"China is one of the very few bright spots in their business," Koji Endo, an auto analyst at Advanced Research Japan, said before the earnings announcement. "But still, as competition worsens and market goes down, it's hard to imagine they can maintain such rapid growth for long."
While major Japanese carmakers in China have boosted sales faster than rivals this year, some executives have warned of a price war in the market.
Fumihiko Ike, chairman of the Japan Automobile Manufacturers Association and also Honda chairman, warned last month that China's vehicle market has shown signs of a "downward spiral" that will eventually hit Japanese carmakers.
The China Association of Automobile Manufacturer expects passenger vehicles sales to grow 6 percent in 2015, the slowest expansion in four years as economic growth moderates.
Honda and other Japanese carmakers have bucked a slowdown in China this year. The carmaker boosted China sales by 30 percent in the first six months as it introduced new compact and crossover models. Its performance in China helped Honda partly offset slumping sales in Japan and Southeast Asia.
"China is one of the very few bright spots in their business," Koji Endo, an auto analyst at Advanced Research Japan, said before the earnings announcement. "But still, as competition worsens and market goes down, it's hard to imagine they can maintain such rapid growth for long."
While major Japanese carmakers in China have boosted sales faster than rivals this year, some executives have warned of a price war in the market.
Fumihiko Ike, chairman of the Japan Automobile Manufacturers Association and also Honda chairman, warned last month that China's vehicle market has shown signs of a "downward spiral" that will eventually hit Japanese carmakers.
The China Association of Automobile Manufacturer expects passenger vehicles sales to grow 6 percent in 2015, the slowest expansion in four years as economic growth moderates.
