Japanese auto giant Honda on Friday logged a record annual profit thanks to improving global vehicle sales, but issued a cautious outlook for the current fiscal year.

The company said net profit for the year to March soared 70 percent to 1.1 trillion yen ($7.1 billion) on sales of 20.4 trillion yen, up 20.8 percent from the previous year.

Honda has made big outlays as it aggressively pursues a target set three years ago of achieving 100 percent electric vehicle sales by 2040.

Its 2023-24 results come two weeks after it announced the largest automotive investment in Canada's history for a new US$11 billion EV battery and vehicle assembly plant.

The company already has a partnership in electric vehicles with Sony, and is exploring collaboration with arch-rival Nissan as they face a "once-in-a-century" upheaval in the car industry -- a move analysts say is aimed at catching up with Chinese EV competitors.

On Friday, Honda said global vehicle sales were up, thanks largely to its vehicles' popularity in the United States.

Sales volume was down in China, however, while its motorcycle division's robust sales in India and Brazil offset falls in Vietnam.

Price increases and the weak yen boosted profits overall, Honda said.

For the year to March 2025, the company expects net profit to fall 9.7 percent to 1.0 trillion yen on sales of 20.3 trillion yen, down 0.6 percent.

Rising costs and changes to forex rates may put pressure on company results going forward, it said.

Vehicle sales in the United States and the Japanese markets are expected to grow, Honda said, but it predicted sales in the rest of Asia would ease.

Nissan on Thursday said it had nearly doubled its 2023-24 net profit, weathering challenges in the Chinese market, but forecast a dip of around 10 percent for 2024-25.

Toyota, the world's top-selling automaker, also posted a record annual net profit this week.