Profit at Japan’s Honda doubles on healthy global auto and motorcycle sales

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. perk / pɜrk / (n.) – an advantage

    His perks as an employee include a car provided by the company.

  2. profitability / prɒf ɪ tə ˈbɪl ɪ ti / (n.) – the ability or state of earning money

    The managers are discussing the profitability of the business plan.

  3. ease / iz / (v.) – to make something less difficult or unpleasant

    City planners are looking for ways to ease heavy traffic.

  4. bank on (something/someone) / bæŋk ɒn / (phrasal v.) – to expect or depend on something or someone

    I’m banking on my friend to help me set up my store’s website.

  5. prosper / ˈprɒs pər / (v.) – to become successful

    Our family business prospered because we provide great customer service.


Read the text below.

Honda reported that its April-June profit more than doubled on healthy sales of its motorcycles and cars, as the Japanese company also received a perk from favorable exchange rates.

Quarterly sales jumped 21% to 4.6 trillion yen ($32 billion). Honda’s financial service division also reported growing sales.

Honda, which makes the Fit subcompact, Honda electric car and Gold Wing motorcycle, said its profitability improved, especially in North America, where production recovered.

Automakers around the world were slammed by supply shortages because of production delays related to social restrictions caused by the COVID-19 pandemic. But such restrictions have eased, allowing production to pick up again.

Auto sales were about the same in Japan in the latest quarter as in the previous year, while dropping significantly in China because of intense competition from makers of battery electric vehicles, Honda said.

Honda is banking on growth in EVs in the U.S. market, where it recently announced it is joining six other companies in the creation of a high-powered charging network across North America.

Worries about climate change have helped set off a dramatic shift in the auto industry toward battery electric vehicles, allowing for relative newcomers like Tesla and BYD to prosper, while catching some Japanese makers off guard with their hybrids and regular gasoline-powered models.

Honda said a computer chip shortage crimped its motorcycle sales in India, while sales rebounded in Indonesia as production recovered.

Honda said it sold 901,000 vehicles in the latest quarter, up from 815,000 a year earlier. It also sold more motorcycles worldwide at nearly 4.5 million, up from 4.2 million.

Honda added 23 billion yen ($160 million) to its quarterly operating profit because of the impact of currency exchange rates. A weaker yen, trading lately at about 143 yen to the U.S. dollar, is a boon for Japanese exporters by boosting the amount of its overseas earnings when converted into yen.

Honda stuck to its full-year projection of an 800 billion yen ($5.6 billion) profit, up from 651 billion yen a year earlier.

Honda shares slipped 0.9% on the Tokyo Stock Exchange.

This article was provided by The Associated Press.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

  • How do you think Honda’s emphasis on growth in the EV market will affect its overall business strategy and profitability in the coming years? Why? Discuss.
  • Given the increasing competition in the EV market, what steps do you believe Honda should take to remain competitive? Why? Discuss.

Discussion B

  • What do you see as the main driving forces behind the shift toward electric vehicles in the auto industry (ex. environmental concerns, advanced technology)? How do you think this shift impacted companies like Honda? Why? Discuss.
  • Worries about climate change have helped set off a dramatic shift in the auto industry toward battery electric vehicles. Do you think this shift is a win-win solution for the companies and the environment? Why or why not? Discuss.