TOKYO – Honda’s profit fell 1.7% for the fiscal year ended in March as sales were hit by a semiconductor shortage in China and restrictions related to the coronavirus pandemic. But the Japanese automaker said Thursday that a recovery is on track, forecasting record sales and operating profitability for the current fiscal year. Net profit totaled 695.2 billion yen ($5.2 billion) for the fiscal year just ended, as declining auto sales and rising research costs offset the benefits of a favorable currency exchange rate. A cheaper yen is a plus for Japanese exporters like Honda because it increases the value of foreign earnings when converted into yen. Sales for the fiscal year rose 16% to 16.9 trillion yen ($126 billion), lifted by healthy motorcycle sales. Tokyo-based Honda Motor Co. forecast record sales revenue of 18.2 trillion yen ($136 billion) for the fiscal year ending March 2024. The projected 1 trillion yen ($7.5 billion) operating profit for the fiscal year, if achieved, would also be a record for the company. The maker of the Accord sedan and Odyssey minivan expects fiscal year net profit to rise to 800 billion yen ($6 billion). Although auto sales fell year-on-year for the fiscal year just ended, they are expected to recover, Chief Operating Officer Shinji Aoyama told reporters. Also on Thursday, Honda announced it had signed a joint venture agreement with GS Yuasa, which makes batteries for cars and motorcycles, to set up a new company to research and develop batteries for electric vehicles. The company will focus on cooperation in lithium-ion batteries, including production methods, the two sides said. The new company, which is receiving 2 billion yen ($15 million) in capital, is 50% owned by Honda and 50% by GS Yuasa. The move comes at a time when the world’s automakers are scrambling to keep up with a major consumer shift toward EVs, as demand grows, particularly in China, but also elsewhere such as the US and Europe. Koichi Yamamoto, president of the new company, said, “The new company will fully leverage the strengths of the two companies and establish a strong presence in the rapidly expanding battery market. ___ Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama
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