Honda said yesterday its half-year net profit jumped as strong North American sales helped offset the impact of an exploding airbag crisis and sluggish demand in the Japanese market.
The Civic sedan maker’s net profit in the six months through September rose 14% to ¥313.7bn ($2.59bn), while sales jumped more than 15% to ¥7.32tn.
Japanese automakers have benefited significantly from healthy growth seen in the US market with low interest rates, while the weaker yen has made them relatively more competitive overseas and inflated the value of repatriated overseas profits.
Sales have been sluggish in their home market, however, after a sales tax rise last year dented consumer spending and as younger urban residents delayed buying a vehicle.
“Honda is showing strong results,” said Shigeru Matsumura, analyst at SMBC Friend Research Center.
“The impact of airbag recalls on Honda is receding, while its sales are expected to grow in North America thanks to its planned introduction of new Civic models.”
This summer Honda revised down its annual earnings for the previous fiscal year, blaming the expanding recalls of faulty airbags made by embattled supplier Takata, which have been linked to eight deaths and scores of injuries.
Takata shares plunged nearly 20% at one stage Wednesday after Honda said it was dumping it as an airbag parts supplier and US safety regulators slapped it with a record fine.
Of the dozen global automakers affected by the auto parts crisis, Honda has been the hardest hit, with the company recalling more than 24mn vehicles to fix the deadly defect.