Honda’s earnings dropped significantly in the April–June quarter, as the automaker grappled with the impact of steep U.S. tariffs on vehicle exports.
The Japanese company reported a profit of 196.7 billion yen (approximately $1.3 billion), nearly 50% less than the 394.7 billion yen it posted during the same quarter a year ago. Revenue for the quarter dipped slightly, falling 1.2% to 5.3 trillion yen ($36 billion).
Despite the sharp decline, Honda revised its full fiscal year profit forecast upward. The company now expects to earn 420 billion yen ($2.9 billion) by March 2026, up from its earlier projection of 250 billion yen. However, this new forecast still reflects a 50% drop compared to the previous year’s results.
Honda maintained its global vehicle sales target of 3.62 million units for the fiscal year.
The company noted continued strength in its motorcycle operations in Brazil and Vietnam, while car sales in North America remained steady even in the face of rising tariffs.
Honda estimated the total negative financial impact from the tariffs at around 450 billion yen ($3 billion), based on a comprehensive internal review.
Globally, Honda’s auto sales for the quarter slipped to 839,000 units, down from 869,000 a year ago. Sales were lower year-over-year in Japan, other parts of Asia, and Europe.
The company also took a one-time hit related to its electric vehicle business, which included losses from EV sales in the U.S. and write-offs tied to changes in its model lineup.
Eiji Fujimura, Honda’s Chief Financial Officer, welcomed a recent agreement between Japan and the U.S. that will reduce the proposed 25% tariff on imported vehicles to 15%. He called the move a “positive” step for the company’s operations, customers, suppliers, and shareholders—even though the revised rate remains higher than past levels.
Fujimura emphasized Honda’s long-standing commitment to free trade and fair competition, saying the company aims to deliver quality products while supporting local communities.
“We now have to adapt to this new normal,” he told reporters.
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