Still, this profit represents a 88 percent drop in operating profit from a year ago, when Honda posted a $2.2 billion profit. The steep decline is still well above the forecasted loss for the period in question, with all expecting Honda to post a huge operating loss.
As a result, the Japanese are now expecting an increase in sales in the months to come and they increased the forecast for the operating profit it will have this fiscal year to $742 million and a net profit of $581 million. Sales forecasts have also been raised, Honda now aiming to sell 3.3 million vehicles to the end of March 2010.
Most of Honda's forecasts are based on their new Insight, who is expected to be as big of a hit in the US as it is in Japan. So far, Honda has held back deliveries of the Insight to the States in order to meet the high demand in its native country. Combined with the signs of revival coming from the American market, Honda's expectations are justified. The CARS program will benefit Honda in full, with the Japanese manufacturer announcing all its models are eligible for the incentive.
In mid July, Honda announced will also boost annual production capacity in China from 165,000 to 200,000 units a year at its Dongfeng Honda Automobile operation. In all, the company's output in China will rise to 610,000 vehicle per year.
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