Honda said on Friday it would increase research and development spending this financial year by nearly a quarter to boost its competitive edge in hybrid and other electrified vehicles (EVs) as it forecast a 2.8% rise in operating profit for 2024/2025.
Japan's second largest carmaker by volume announced a share buyback worth up to 300bn yen (R35.55bn) after beating analysts' fourth quarter earnings estimates, helped by strong sales growth in the US which offset a decline in China.
A weaker Japanese yen and robust hybrid model sales also contributed to Honda's profit.
The company forecast full-year operating profit would rise to 1.42-trillion yen (R167.94bn) compared with an average profit estimate of 1.39-trillion yen (R164.39bn) in a poll of 22 analysts by LSEG.
Honda, which is a latecomer to purely EVs that only run on a battery, plans to spend 1.19-trillion yen (R140.74bn) for research and development this year, up 23% from the previous year, it said.
“Our plan is to create an environment that allows us to produce 2-million hybrid models in a year by 2030 and we have been planning our business strategy taking into account necessary investment,” CEO Toshihiro Mibe told reporters.
Operating profit for the three months to March 31 grew more than six-fold from a year earlier to 305.6bn yen (R36.13bn), well ahead of the 248.3bn yen (R29.36bn) average expected by nine analysts.
Carmakers are focusing more on hybrid vehicles as sales of full EVs disappoint. South Korea's Hyundai said on Wednesday it plans to use investment already lined up for the US to produce hybrid vehicles at its EV plant there.
Mibe said he is seeing “good progress” in talks with rival Nissan over a possible partnership to collaborate on producing EV components, and hopes to update the market in the near future.
For the January-March period, Honda posted a 17% sales rise in its biggest overseas market, the US, to about 378,000 vehicles. However, its sales in China fell by more than 6% to about 207,000 vehicles.
In China, the world's biggest car market, Honda is among Japanese car brands that have struggled against more nimble and faster-moving local rivals that have attracted Chinese drivers with low-cost, technology-loaded EVs.
The company said last month it plans to build an EV production base in Ontario, Canada, and launch six EV models branded Ye in China by 2027.
Honda ramps up R&D spending as it expands hybrid push
Honda said on Friday it would increase research and development spending this financial year by nearly a quarter to boost its competitive edge in hybrid and other electrified vehicles (EVs) as it forecast a 2.8% rise in operating profit for 2024/2025.
Japan's second largest carmaker by volume announced a share buyback worth up to 300bn yen (R35.55bn) after beating analysts' fourth quarter earnings estimates, helped by strong sales growth in the US which offset a decline in China.
A weaker Japanese yen and robust hybrid model sales also contributed to Honda's profit.
The company forecast full-year operating profit would rise to 1.42-trillion yen (R167.94bn) compared with an average profit estimate of 1.39-trillion yen (R164.39bn) in a poll of 22 analysts by LSEG.
Honda, which is a latecomer to purely EVs that only run on a battery, plans to spend 1.19-trillion yen (R140.74bn) for research and development this year, up 23% from the previous year, it said.
“Our plan is to create an environment that allows us to produce 2-million hybrid models in a year by 2030 and we have been planning our business strategy taking into account necessary investment,” CEO Toshihiro Mibe told reporters.
Operating profit for the three months to March 31 grew more than six-fold from a year earlier to 305.6bn yen (R36.13bn), well ahead of the 248.3bn yen (R29.36bn) average expected by nine analysts.
Carmakers are focusing more on hybrid vehicles as sales of full EVs disappoint. South Korea's Hyundai said on Wednesday it plans to use investment already lined up for the US to produce hybrid vehicles at its EV plant there.
Mibe said he is seeing “good progress” in talks with rival Nissan over a possible partnership to collaborate on producing EV components, and hopes to update the market in the near future.
For the January-March period, Honda posted a 17% sales rise in its biggest overseas market, the US, to about 378,000 vehicles. However, its sales in China fell by more than 6% to about 207,000 vehicles.
In China, the world's biggest car market, Honda is among Japanese car brands that have struggled against more nimble and faster-moving local rivals that have attracted Chinese drivers with low-cost, technology-loaded EVs.
The company said last month it plans to build an EV production base in Ontario, Canada, and launch six EV models branded Ye in China by 2027.
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