Honda Motor in Japan reported a 15% drop in its Q2 profit, surprising analysts. The profit for July to September was 257.9 billion yen ($1.68 billion). This marked Honda’s first yearly profit drop in seven quarters. Last year, profit for the same period was 302.1 billion yen ($1.96 billion), and analysts had expected 427.2 billion yen ($2.77 billion).
Despite this, Honda kept its full-year profit forecast at 1.42 trillion yen ($9.21 billion). The company said sales from April to September were lower than last year. Sales fell in China, which offset growth in the U.S. and Japan.
Globally, Honda’s vehicle sales dropped by 1.5% to 2.8 million units in the first nine months of the year. In China, sales fell by 29%, and in Asia and Oceania, sales dropped by 6%. However, Honda saw stronger sales in the U.S. and Japan.
Honda faces challenges in China, its largest market until last year. Chinese consumers are moving towards electric and hybrid cars from local brands. These cars offer lower prices and advanced technology.
In response, Honda has reduced its workforce in partnerships with Dongfeng Motor and Guangzhou Automobile Group. Honda also stopped production at some plants to make its operations more efficient.
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