Dive Brief:
- Honda Motor reported a 78% rise in quarterly profit on Wednesday, boosted by a big jump in vehicle sales, according to the company’s first quarter financial results released Wednesday.
- The biggest increase was in United States, with deliveries jumping nearly 45% to 347,000 vehicles in the first quarter.
- Honda’s 2023 sales rebound can be attributed to improvement in supply chains that disrupted vehicle production across the industry throughout 2022.
Dive Insight:
After warning last year that supply chain disruptions would impact its U.S. sales, Honda is seeing a clear comeback in the market as profits surge. Although the automaker only reported sales through June 30, its sales momentum continues with Honda-brand vehicle sales in the U.S. totaling 99,700 units last month.
The average transaction price for Honda vehicles also rose 3% to $37,087 compared with the same period last year, according to Cox Automotive calculations. The higher prices contributed to the jump in Honda’s revenue.
These numbers come as the automaker invests further in U.S. manufacturing. In October 2022, Honda said it would spend $700 million to reconfigure several U.S. auto and powertrain plants, establishing an electric vehicle hub in Ohio as it prepares for the production of battery electric vehicles in 2026.
The company’s North American assembly plants produce around two-thirds of all Honda and Acura vehicles it sells in the U.S. The automaker’s factory in Marysville, Ohio, has been in operation since 1982 and currently produces the Accord and Accord hybrid sedan. Its Liberty, Ohio, plant builds the popular CR-V and CR-V hybrid compact SUVs. Honda also builds the CR-V at a plant in Greensburg, Indiana.
While the U.S. was a bright spot for Honda, the company’s sales in China dropped 5% to 309,000 vehicles in the first quarter, according to the earnings presentation. Eiji Fujimura, Honda’s head of accounting, cited growing competition in the new energy vehicle segment for the decrease in China. In total, Honda sold a total of 771,000 vehicles in the U.S., China and Japan from April through June.
