Honda Motor Co., Ltd. (HMC.US) reported a 23% increase in its Q1 profit due to the popularity of hybrid cars.

Toyota Motor Corp. (HMC.US) announced Wednesday that its first-quarter profit rose 23%, helped by a weaker yen, higher prices and growing sales of hybrid vehicles in the U.S. and Japan.

The second-largest Japanese automaker said its operating profit for the quarter ended June totaled 484.7 billion yen ($3.33 billion), above the 472.4 billion yen expected by the market.

The company maintained its full-year operating profit forecast of 1.42 trillion yen, while cutting its full-year sales forecast in China by 220,000 vehicles.

Toyota Motor Corp. said last week that its global vehicle sales rose 2% in the first half of the year to 1.9 million, largely due to a 9% increase in the U.S., its largest market, while sales in China fell 23% to 416,000.

Toyota Motor Corp. earlier this month said it would close one of its plants in China and stop production at another due to fierce competition from new Chinese car brands.

Toyota Motor Corp. is seeking to catch up with global rivals in the race to develop electric vehicles and hopes to benefit from a partnership with General Motors Co.

The two companies said last Thursday that they had agreed to jointly study next-generation software platforms and explore cooperation in areas such as batteries, electric motors and vehicle systems.