Home > Information > News

Honda's First Quarter Net Profit Falls 50% Due to Tariff

Gasgoo 2025-08-08 09:06:33

On August 6, Honda Motor Company announced its results for the first quarter of the current fiscal year (ending March 31, 2026). Affected by a stronger yen and U.S. President Trump’s tariff policies, the company’s net profit was 196.6 billion yen (approximately $1.3 billion), down 50.2% year-on-year. Operating profit totaled 244.2 billion yen (approximately $1.66 billion), a decrease of about 49.6% year-on-year, and more than 20% below the average expectation of 311.7 billion yen from a survey of seven analysts by the London Stock Exchange Group (LSEG). The operating margin dropped from 9% in the same period last year to 4.6%. Revenue fell 1.2% to 5.3 trillion yen.

Honda Motor Co. stated that the 27.5% high tariff imposed by the United States on Japanese imported cars (including the original 2.5% rate and the additional 25% tariff imposed by Trump in April) has resulted in the company's operating profit for the quarter decreasing by approximately 125 billion yen.

Image source: Honda Motor

However, Honda Motor Co. stated that the impact of tariffs on its full-year operating profit is expected to be less than the estimate in May. Honda's Chief Financial Officer Eiji Fujimura said that the current expected loss due to tariffs for the full year is 450 billion yen, lower than the previous estimate of 650 billion yen. Therefore, Honda has raised its full-year operating profit forecast from 500 billion yen to 700 billion yen and expects the yen exchange rate to weaken. Fujimura also said that the company maintains its full-year vehicle sales forecast unchanged at 3.62 million units.

Honda stated that the reason for the upward revision of its operating profit forecast is due to changes in tariff levels and foreign exchange outlook. In addition, the company's motorcycle business performed strongly, mainly driven by growth in the Brazilian market. However, Honda's automotive business experienced a comprehensive decline in the Asian market, with a particularly significant drop in the Chinese market.

Despite the ongoing uncertainty caused by U.S. tariffs, Honda's updated profit forecast signals cautious optimism. The Japanese automaker had previously anticipated potential losses amounting to billions of dollars due to tariffs, but last month's trade agreement between the U.S. and Japan successfully averted the industry's "darkest moment" warning—after multiple rounds of negotiations, the Trump administration ultimately capped tariffs on Japanese automobiles and parts at 15%.

The United States is the largest market for Japan’s five major automakers, including Honda. According to Bloomberg Industry Research, Honda sold approximately 1.4 million vehicles in the U.S. in 2024, with nearly 40% of them being imported models.

Honda also stated that due to declining demand, it will postpone its plans to establish an electric vehicle supply chain in Ontario, Canada by two years. The previously announced plan includes a battery plant and an electric vehicle factory with an annual production capacity of 240,000 units.

【Copyright and Disclaimer】The above information is collected and organized by PlastMatch. The copyright belongs to the original author. This article is reprinted for the purpose of providing more information, and it does not imply that PlastMatch endorses the views expressed in the article or guarantees its accuracy. If there are any errors in the source attribution or if your legitimate rights have been infringed, please contact us, and we will promptly correct or remove the content. If other media, websites, or individuals use the aforementioned content, they must clearly indicate the original source and origin of the work and assume legal responsibility on their own.

Honda's First Quarter Net Profit Falls 50% Due to Tariff

Most Popular