Honda Motor Co. has forecast a 59% decrease in its operating profit for the current financial year, projecting earnings of 500 billion yen ($3.38 billion) for the year ending March 31, 2026, compared to 1.21 trillion yen in the previous year.
The company attributed the decline to ongoing challenges from U.S. President Donald Trump’s tariffs on foreign-made automobiles and increasing competition from Chinese electric vehicle (EV) manufacturers.
As part of its response to these challenges, Honda also announced a delay of its planned EV supply chain development in Ontario, Canada, originally set to begin in April 2024. The company cited the current slowdown in EV demand as the primary reason for postponing the project for about two years.
In addition, Honda revealed it expects a 650 billion yen impact on its operating profit in fiscal 2026 due to tariffs across various countries. This includes an estimated 300 billion yen impact on imports of around 550,000 finished vehicles.
However, Honda plans to offset approximately 200 billion yen of this cost through mitigation efforts.
The automaker also discussed its halted merger talks with Nissan earlier this year, though the two companies continue to collaborate on technology. CEO Toshihiro Mibe emphasized that Honda would explore new growth opportunities through strategic partnerships despite the ongoing difficulties in the automotive industry.
