Honda Projects 58.8 Percent Profit Decline Due to Tariffs
(MENAFN) Honda Motor announced on Tuesday that it expects its operating profit to plummet by 58.8% in the current fiscal year, attributing the decline to costs related to tariffs.
The Japanese automaker is now forecasting an operating profit of 500 billion yen ($3.38 billion) for the fiscal year ending March 31, 2026, a significant decrease from last year’s 1.21 trillion yen ($8.17 billion), according to a company statement.
Honda noted that a loss of 450 billion yen ($3 billion) would result from “tariff impact and recovery efforts for tariff impact” in its updated profit projections.
For the fiscal year that ended in March, Honda reported a 6.2% increase in revenue, reaching 21.69 trillion yen ($146.63 billion). However, operating profit fell 12.2% to 1.21 trillion yen ($8.18 billion), while net profit dropped by 24.5%, to 835.84 billion yen ($5.65 billion).
The outlook for this year comes as the global automotive sector faces rising competition from Chinese electric vehicle makers and increased tariffs stemming from U.S. President Donald Trump’s trade policies, with a 25% tariff imposed on foreign-made vehicles creating further instability.
Additionally, Honda and Nissan recently ended talks on a potential merger, which would have formed the world’s third-largest automaker by sales volume, valued at $60 billion.
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