David Fickling is a Bloomberg Gadfly columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.

Japan's second-biggest carmaker has been going through a difficult patch.

The costs of recalling tens of millions of vehicles because of Takata's defective airbags have been weighing on profit, lopping 436 billion yen ($4.3 billion) from earnings last year and 120 billion yen the year before that.

Four Wheels Good, Two Wheels Good
Motorcycles accounted for a bigger share of Honda's operating income than cars last year
Source: Bloomberg

Trailing 12-month revenue fell for the first time in four years, as the stronger yen depressed the value of overseas sales. Things got so bad that financial services and motorcycles accounted for a larger share of operating income than automobiles in fiscal 2015.

Luckily for Honda's shareholders, new Chief Executive Officer Takahiro Hachigo has been applying lessons learned in the U.S. and Asia, the company's two largest markets.

Bouncing Back
Honda's first-quarter operating income was its best since the 2008 financial crisis
Source: Bloomberg

Thanks to cost cutting, an improving product selection and a reduction in warranty costs such as those caused by the Takata failures, first-quarter operating income came in about 46 percent higher than the 184 billion yen median of seven analyst estimates, the best three-month result since 2008.

China, where Hachigo was based before taking up the top job last year, looks particularly strong. Automobile sales rose 12 percent in Asia ex-Japan to 453,000 units during the quarter, driven by SUVs in China, the company said in a presentation, putting the region on track to overtake North America as Honda's biggest market in the near future.

Rising Sun
Honda's Asian automobile sales look on track to consistently overtake North America
Source: Company reports

That should temper concerns that diminishing returns from Abenomics will automatically cripple companies that have ridden its wave in recent years.

While Honda forecasts the strengthening yen will cause a one-time cost of about 303 billion yen this year, the end of all those Takata-related expenses will generate a matching benefit of 291 billion yen. And while those currency effects are hurting on the revenue side, at least they're not doing as much harm to Honda's costs as they are to its peers.

The company made just 16 percent of its vehicles in Japan last year, less than the 22 percent figure for Nissan and well below Toyota's 46 percent. Made in Japan used to be something to boast about. Nowadays, Hachigo should be grateful he has so many factories offshore.

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