By Olivia Hart

Honda raised its net profit forecast for the year ending March 2027 to ¥500 billion from ¥400 billion. First-half net profit rose 66% to ¥516.76 billion from ¥311.83 billion in the prior-year period, while revenue increased 13% to ¥12.038 trillion from ¥10.6 trillion.

What drove the first-half result?

For the six months ended September, Honda delivered a record 11.9 million motorcycles, compared with just under 10.8 million a year earlier. Sales in India and Brazil drove the revenue increase.

The first-half profit still fell short of the ¥643.17 billion consensus in a Quick analyst poll. For Honda’s investors, the result combines strong motorcycle demand with a substantial gap to consensus, leaving the raised annual target dependent on the second half.

Where did volume weaken?

First-half car sales totaled 1.57 million, down from 1.68 million a year earlier. Honda now expects 3.16 million car sales for the full year, revised down from 3.39 million.

The motorcycle forecast moved in the opposite direction. The company expects 23.3 million motorcycles, up from 22.8 million, making motorcycles the clearest source of volume growth in a plan that anticipates fewer cars.

How much did the full-year outlook improve?\n

Honda raised its revenue forecast to ¥24.4 trillion from ¥24.15 trillion. It lifted its operating profit forecast to ¥780 billion from ¥650 billion, while the net profit target increased by ¥100 billion.

The company said the stronger outlook reflected favorable exchange rates and steps to limit the effect of U.S. tariffs, such as moving production into the United States. The raised target therefore relies on currency, motorcycle volumes and tariff mitigation, even as projected car sales decline.

What is the EV cost burden?

In a filing, Honda said it recognized EV-related losses and expenses of ¥479.24 billion in cost of sales and ¥5.62 billion in research and development for the six months. It also recorded a ¥49.72 billion gain in its share of profit from equity-method investments tied to the EV losses.

Honda has canceled the development and launch of certain EV models. Taken together, the charges, investment gain and canceled programs keep electric vehicles at the center of Honda’s earnings risk despite the stronger motorcycle business.

What does the Astemo purchase change?

On Oct. 1, Honda completed the purchase of an additional 21.0% of the auto-parts maker Astemo for ¥152.275 billion in cash. That raised Honda’s stake from 40.0% to 61.0% and made Astemo a subsidiary.

The transaction shifts Astemo from minority ownership to majority control within Honda’s group. Honda has exchanged ¥152.275 billion in cash for a 21-point increase and a larger claim on the parts maker’s results.

How is production capacity changing?

On Monday, Honda announced plans for a $3 billion factory in central Ohio. Production is slated to start in 2029, pending final government approvals; the plant would have capacity for 240,000 vehicles a year and create more than 2,000 jobs.

Honda aims to lift vehicle capacity in North America from 1.67 million to 1.91 million by 2029. Moving production into the United States also forms part of the tariff mitigation Honda cited in its stronger outlook, linking capacity investment directly with trade exposure.

Honda also plans to expand the Manaus factory in Brazil from 1.6 million motorcycles a year to 2.3 million by 2029. The company is therefore adding vehicle capacity in the United States while increasing motorcycle capacity in Brazil.

Honda stock had dropped 1.6% in Tokyo on Tuesday before the earnings announcement. The forecast increase now gives investors a clearer test: Honda must convert record motorcycle demand, favorable exchange rates and new production capacity into earnings while lower car volumes and substantial EV-related charges remain visible in its accounts.