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The Chinese market is picking up! Honda raises net profit for fiscal year 2023

2024-06-17 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)11/12 Report--

On November 9, Honda officially released its results for the second quarter of 2023, which ended September 30, 2023. Data show that Honda sales rose 17 percent to 4.98 trillion yen (240.49 billion yuan) in the second quarter, roughly the same as the forecast of 4.97 trillion yen; operating profit was 302.13 billion yen, lower than the forecast of 350.16 billion yen; but the net profit reached 253.23 billion yen, slightly lower than the forecast of 257.76 billion yen.

Foreign media reported that Honda's local sales declined due to the growing demand for electric cars in China, while sales in Japan and North America showed a momentum of growth over the same period. Honda sold more than 1.9 million new cars worldwide in the first half of fiscal year 2023.

The latest sales figures show that Honda sold 130424 vehicles in China in October, compared with 122.9% in the same period (up 22.92% year-on-year and 18.93% month-on-month). This is the fifth time that Honda has sold more than 100, 000 vehicles this year, and it is also Honda's best monthly sales in China this year. However, Honda's annual sales in China fell 16.84% in the first 10 months of this year compared with the same period last year, with cumulative sales of 961729 vehicles.

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It should be noted that many Japanese automakers, including Honda, continue to be under pressure due to factors such as changes in the car market. On November 6th, FAW Toyota, which is also a Japanese manufacturer, said that it would continue to adjust production allocation significantly in the next three months on the premise that it had cut production sharply in October and November. The move is intended to improve the inventory pressure and financial pressure of dealers. Among them, the allocation was adjusted down to 66000 in December, 60, 000 in January and 38000 in February. FAW Toyota said in the letter, "despite the low level of the market, the next three months will still be the peak sales season with the highest seasonal index of the year, and we believe that dealers will seize the market opportunity to maximize delivery."

However, Honda officially readjusted its performance forecast for this year based on its good financial performance in the second quarter. Honda expects an operating profit of 1.2 trillion yen for fiscal 2023, compared with a previous estimate of 1 trillion yen, and a net profit of 930 billion yen this fiscal year, compared with a previous estimate of 800 billion yen.

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The auto industry is undergoing a dramatic transition to intelligence and electrification, while Honda is in transition. In April last year, Honda announced plans to spend 8 trillion yen on research and development over the next 10 years, including about 5 trillion yen in electrification and software technology. According to the plan, Honda will launch 30 pure electric vehicles in the global market by 2030, with annual production of more than 2 million vehicles; by 2040, Honda will account for 100% of sales of pure electric vehicles and fuel cell vehicles (FCEV).

In addition, in order to accelerate the electrified layout transformation and ease the pressure on sales, Honda China has announced that it will fully enter the electric era. After 2027, all Honda models launched in China will be hybrid and pure electric vehicles. No longer put in new pure fuel models; by 2035, Honda China will achieve 100% of pure electric vehicle sales. According to the joint venture, Guangzhou Auto Honda said on October 26 that it would no longer launch new pure fuel models from 2027, when all Honda models sold in China would be 100% electrified from 2035. Earlier, on July 16, Dongfeng Honda announced that it would launch its new independent pure electric brand in the second half of this year, with more than 50% electrification by 2025, no new fuel cars after 2027, and more than 10 pure electric models by 2030.

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Judging from Honda's timetable for suspending the sale of fuel cars, Honda China has realized that to maintain long-term development in the Chinese market, it needs to accelerate the transition to a new energy market and accelerate the introduction of electrified products to reduce the possibility of being left behind.

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