Net profits in the third quarter rose 40% to a record 115.2bn yen (£585.2m; $967.6 million).

The Pilot sports utility car, the Element light truck and the Accord proved big hits with American consumers.

Honda said it will introduce a new Acura sports sedan this spring, which should boost its US sales this year by 8% to 1.35 million cars.

Honda's North American business is thriving Goldman Sachs report

In order to keep up with demand, Japan's number two car maker said it wanted to double capacity at its Alabama plant, which builds light trucks.

No cheap deals

The rise in profits comes despite the fact that Honda's operations are suffering in Japan because of sluggish demand and strong competition.

Sales increased 13.3% to 1.99 trillion yen, beating expectations.

In contrast to some of its rivals, Honda has been able to retain a high profit margin by standing firm on car prices in the US.

Competitors like Ford and General Motors have been forced to lower prices in order to lure reluctant buyers into their showrooms.

"Honda's North American business is thriving: not only are sales of existing models firm, but all new models introduced since mid-2002 are also doing well," Goldman Sachs wrote in a report.

Cautious

Although Honda issued a shock cut in full-year forecasts three months ago, it reversed some of that on Friday, raising its net profit target to 430bn yen from 410bn yen.

But analysts remained cautious.

"The quarterly numbers look pretty strong, and the upward revision to their full year forecast is pleasing.

"But Honda was coming off a shock earnings report last October so it's hard to judge overall," said Hiroshi Mizutani, general manager at Asahi Life Asset Management.