TOKYO (Reuters) -Japan's Honda (NYSE:HMC) Motor reported a 23% increase in first-quarter profit on Wednesday as the automaker benefited from a weaker yen, higher pricing and growing hybrid vehicle sales in the U.S. and its home market.
Japan's second-biggest carmaker said quarterly operating profit totalled 484.7 billion yen ($3.3 billion) in the April-June period, compared with an average estimate of 472.4 billion yen in a poll of seven analysts by LSEG.
The company maintained its full-year operating profit forecast of 1.42 trillion yen, while slashing its sales outlook for China by 21% to 840,000 vehicles for that period.
Honda said last week its global vehicle sales grew 2% to 1.9 million over the first six months of the year, largely due to a 9% rise in sales in the U.S., its top market.
In contrast, it faced heavy headwinds in China where it saw sales slump 23% to 416,000 vehicles.
In China, Honda has been suffering from heavy price competition and a faster-than-expected decline in the market for internal combustion engine vehicles, CFO Eiji Fujimura told an earnings briefing.
Honda said earlier in July that it will close a factory in the world's biggest auto market and halt vehicle production at another plant amid intense competition from newer Chinese auto brands.
It plans to start production at two new electric vehicle plants in China run through two joint ventures with Chinese automakers later this year.
Honda is seeking to catch up with faster-moving global rivals in the shift to battery-powered electric vehicles, for which it is looking to profit from cooperation with rival Japanese automaker Nissan (OTC:NSANY) Motor.
The companies said on Thursday they had agreed to research technologies for a next-generation software platform together and sought to cooperate in areas such as batteries, e-axles and vehicle complementation.
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