TOKYO — Japanese government incentives for green cars and strong sales in China helped Honda Motor avoid red ink for the first half and raise its full year profit forecast.

Japan's No. 2 automaker said today it now expects a net profit for the fiscal year ending March of $1.7 billion, nearly four times its initial outlook. Hit by a strong yen and weak global auto market, net profit for the July-September quarter fell 56.2 percent from a year earlier to $587 million but was better than expected. For the first half, the automaker booked a net profit compared with its earlier loss projection.

Honda has succeeded in weathering the global slump better than some rivals because it focuses on smaller, fuel-efficient models such as its new Insight hybrid, which has been a big hit in Japan where all hybrids are now tax-free.

The automaker stayed in the black in the fiscal year ended March 2009, while Toyota and Nissan posted losses.