Honda has posted a 63% gain in its fiscal Q2 earnings as strong sales of its new CR-V crossover made up for higher raw material costs. The company raised its full-year net profit forecast.
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Orders have been especially strong for the remodelled CR-V from would-be SUV drivers looking for fuel economy.
Honda said July-September net profit was 208.5 billion yen – well ahead of an average estimate of 185.8 billion yen from four brokerages surveyed by Reuters Estimates and above last year’s 127.9 billion profit.
Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, told Reuters the results were firm, but warned US demand warranted close monitoring.
“They rely quite heavily on the US market and housing there right now is very weak. Cars and housing are really linked, so we have to watch this,” he said, adding that a recent strengthening in the yen was also a potential risk.
Honda Executive Vice President Koichi Kondo said that while the subprime mortgage issue has had little impact on its US car sales, it was dealing a “significant” blow to motorcycle sales, Reuters said.
It seems people are pulling back on leisure products,” he told a news conference, adding a further 10 billion yen of profit-eroding sales incentives will be offered in North America.
