Honda Motor Co. has boosted its operating profit outlook for the current fiscal year, a sign sales are progressing well despite the global chip shortage that is disrupting the auto industry’s supply chain.
The automaker is targeting an operating profit of ¥520 billion ($5 billion) for the 12 months through March, compared with a prior forecast for ¥420 billion, it said in an exchange filing Tuesday. That compares with analysts’ average projection for ¥469 billion, according to data compiled by Bloomberg.
The rosier-than-expected outlook comes as a global chip shortage is straining many automakers. Housebound consumers have ramped up purchases of personal computers, tablets and video games, depleting semiconductor supplies that are essential to the technology needed in modern-day cars. That risks slowing a healthy rebound in car sales after automakers faced a coronavirus-induced slump.
Whether the chip shortage will affect sales of Honda’s new models, such as the Vezel, Civic and MDX, is key, said Tatsuo Yoshida, an analyst at Bloomberg Intelligence. "Risks beyond the third quarter include virus outbreaks that restrict economic activity and logistics issues such as parts shortages, both internally and at auto-parts suppliers,” Yoshida added.
Honda’s sales revenue for the third quarter rose just 0.6% to ¥3.8 trillion, while operating profit increased 67% to ¥277.7 billion. That was mainly due to greater efficiency in research and development expenditure and cost control, and came despite unfavorable currency moves, Honda said.