Japanese auto major Honda Motor announced a 78% increase in quarterly earnings, helped by higher sales, particularly in the North American market, and a cheaper yen.

The second-largest automaker in Japan by sales reported operating profit of 394.4 billion yen ($2.76 billion) for the three months that ended in June, easily exceeding the average estimate of 324.74 billion yen in a Refinitiv poll of ten analysts.

In contrast, the same time period the previous year saw a profit of 222.2 billion yen.

Honda reported a 44.7% year-over-year increase to 347,000 units, benefiting from robust retail sales to consumers in the important U.S. market as the impact of post-pandemic supply interruptions in parts and chips eases.

Faced with escalating local rivalry and a swift switch to electric vehicles in the world’s largest auto market, Honda announced for the quarter a severe 5% decline in sales in China to 309,000 units.

According to a Honda executive, the company’s business conditions in China have gotten worse since it first predicted selling 1.4 million vehicles for the entire year.

“We’re still operating amid some restrictions from semiconductors,” the official said.

“If we were to revise our sales forecast in China, we’ll want to move ahead with considering whether we can distribute parts to and manufacture more in other regions.”

Honda kept its operational profit prediction for the current year at 1.0 trillion yen, which was lower than the 1.117 trillion yen average forecast from 22 analysts.

When the firm reports second-quarter results at the beginning of November, it will consider whether an upgrade to its full-year outlook is necessary, taking into account the advantages it sees from a lower yen.

(Adapted from BusinessTimes.com.sg)