Honda Motor Co. increased by 6 percent its full year net profit expectations to reach the ¥415 billion mark. The upgrade in revenue expectations is the result of Honda’s outlook of performance in the Chinese market.
“We’re seeing a positive impact from our new models. The Civic is doing very well in North America, China and South America,” Honda Executive Vice President Seiji Kuraishi said at a company briefing. The Japanese car manufacturer is betting Chinese customers will continue favoring its XR-V, Vezel SUVs, and Civic models.
In the first 9 months of 2016, Honda has experienced in Chinese cities a demand 26 percent higher than that registered in the same period in 2015. Sales in Asian cities rose in overall 22 percent in 2016’s second quarter.
The 6-percent increase in expectations accounts for a ¥25 million revenue increase. The company expects the extra revenue will be attained through its strong Asian demand, cost cuts and lower quality-related costs.
Though the outlook is positive, Honda is not celebrating yet. “At the moment we see uncertainties related to the US elections, Brexit and a weaker sterling, and in Asia, the outlook for Thailand after the death of the country’s monarch,” said Kuraishi. “We haven’t seen the impact of these factors yet, but we’re taking a cautious approach to our forecasts.”
Sources: Reuters, Wall Street Journal
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