TOKYO, Nov 10 (Reuters) – Honda raised its annual profit forecast by 20% on Tuesday, as it expected robust demand for hybrid vehicles and a boost from a weaker yen to help offset slumping sales in China.
Japan’s second-largest automaker raised its full-year operating profit forecast to 780 billion yen ($4.94 billion) from 650 billion yen.
The company booked 484.8 billion yen in costs linked to the restructuring of its electric-vehicle business in the second quarter, causing it to report a surprise drop in profit for the period.
Operating profit for the July-to-September quarter fell 39% from a year earlier to 118 billion yen, well below the 250 billion yen median forecast in a poll of nine analysts by LSEG.
It booked more than $9 billion in EV-restructuring-related charges in the previous financial year, pushing the firm into its first annual loss in nearly 70 years in May.
Honda is betting heavily on hybrid vehicles, particularly in the US, its top market. US sales rose 9% in the second quarter and accounted for half of its global retail sales of 823,000 vehicles.
On Monday, Honda said it would build a $3 billion auto plant in Ohio that will be able to produce 240,000 hybrid cars a year and start production in 2029.
($1 = 157.9700 yen)
(Reporting by Daniel Leussink; Editing by Christian Schmollinger and Thomas Derpinghaus)
