Despite recalls Honda records 20% profit rise on yen

Honda said Friday that net profit in April-June jumped almost 20 percent as strong sales in North America and a weak yen helped offset the impact of an exploding air-bag crisis.

Honda is ranked third in Japan’s automotive industry.

Honda estimates its recollects associated to Takata air luggage worldwide at 24.5 million.

Honda’s financial forecasts remain unchanged for the year ending March 2016 – a modest 3.1% rise in net profit to 525 billion yen (RM16 billion). “But still, as competition worsens and market goes down, it’s hard to imagine they can maintain such rapid growth for long”.

“[Our profit gains] progressed at a faster pace than we had expected in the first quarter due to currencies and other factors, but we are not revising the full-year outlook as there are uncertainties such as future foreign exchange moves and costs related to quality issues”, said Executive Vice President Tetsuo Iwamura, reported by The Wall Street Journal. Globally, the recollects quantity greater than 57 million, though a number of the automobiles are being recalled greater than as soon as.

The automaker is reaping the benefits of the weak Japanese yen, which makes it less expensive for the company to operate in the U.S. and a few other markets.

At least eight people have been killed and 100 have been injured by Takata air bags, which can explode with too much force and send shrapnel into the vehicle.

Honda is set to launch a redesigned Civic sedan this autumn in North America, which could help sales in the coming quarters. That is similar to the world’s largest automaker, Volkswagen (6.3%), but trails the second largest and its Japanese rival Toyota (10.1%). The greenback has been buying and selling at 120 yen ranges, up sharply from about 102 yen a yr in the past.

Honda saw its China sales vault 30 per cent in the first half as it introduced new compact and crossover models.

The company still expects to make a net profit of 525bn yen, up 3% from the previous year.

Honda recorded a $1.52-billion profit for the period, its fiscal first quarter.

Information for this article was contributed by Massachusetts Jie and Masatsugu Horie of Bloomberg News.