Honda’s forecast for profits rockets after state’s boost

Honda, Japan's second-largest carmaker, almost tripled its full-year profits forecast today after state stimulus measures in the company's largest markets boosted demand.

The firm said it expects profits of 155 billion yen (£1.03 billion) in the year to the end of March compared with an earlier forecast of 55 billion yen. It came after Honda reported profits of 54 billion yen in the second quarter although this was still down 56% on a year earlier. Honda, Toyota and Nissan have raised sales outlooks in Japan and China as governments offer rebates and tax cuts for new, fuel-efficient cars to revive flagging demand.

"Honda's hybrid models have been selling well with the incentives," said Yuuki Sakurai, chief executive of Fukoku Capital Management in Tokyo. "Whether or not real demand is picking up is still uncertain."

Honda chief executive Takanobu Ito said he hopes sales may rise next in North America, traditionally its most profitable market.