Car and motorcycle manufacturer Honda expects to make more profit than the company previously forecast this fiscal year, which runs through March 2023.

The relatively weak Japanese yen means that vehicles sold in the United States or Europe, for example, are more lucrative for the Japanese company.

The fact that Honda can adjust its profit expectations upwards is also because the earlier forecasts were cautious. Like other automakers, the company has seen profits come under pressure from higher materials and transportation costs, as well as ongoing chip shortages and disruptions from China’s corona lockdowns.

Some of those problems are still there, such as chip shortages. According to financial director Kohei Takeuchi, they will remain at least until the beginning of next year. Due to recent tensions between China and Taiwan, Honda is also trying to stock up on chips, Takeuchi added. In addition, due to inflation in many countries, consumers are delaying significant expenditures, such as buying a car.

In the first quarter of its broken financial year, Honda recorded an operating profit of 222 billion yen or more than 1.6 billion euros. That was more than analysts expected. Honda indicated that cars were becoming more expensive, but the company is also paying more attention to prices. Exchange rate differences also contributed to the result. Honda’s turnover in April to June amounted to 27.7 billion euros.