TOKYO (Reuters) -- Honda Motor Co forecast a smaller-than-expected 10 percent rise in full year operating profit and warned of stiffer competition as Korean and U.S. automakers roll out models to rival its fuel-efficient line-up.

Japan's No.2 automaker is benefiting from a recovery in U.S. sales with a fleet of gas-sipping models such as the Civic sedan, which will be joined by the CR-Z sporty hybrid in North America this summer.
But Executive Vice President Koichi Kondo said neighboring South Korea's Hyundai Motor Co was rapidly raising its game, particularly in Honda's most profitable U.S. market, while the U.S. “Big Three” were also beefing up their offerings.
“More and more, the passenger car segment, where we've traditionally been strong, is becoming a fierce battlefield,” Kondo told a news conference.
For the year to end-March 2011, Honda forecast an operating profit of 400 billion yen ($4.3 billion), up from the 363.8 billion yen it made in the year to March 2010, but down on the 500 billion yen consensus forecast in a poll of 19 analysts by Thomson Reuters I/B/E/S.
Honda sees net profit growing 27 percent to 340 billion yen this year, after a near doubling last year.