Honda Motor Company reported a dramatic 50% year-on-year profit collapse in its April-June quarter, attributing the plunge to punishing 25% US tariffs despite resilient North American sales, according to AP News.
The automaker posted quarterly earnings of ¥196.7 billion ($1.3 billion), down from ¥394.7 billion during the same period in 2024, with global sales dipping 1.2% to ¥5.3 trillion ($36 billion).
While revising its full-year forecast upward to ¥420 billion ($2.9 billion) through March 2026, a significant improvement over February’s ¥250 billion projection, this still represents a 50% annual decline. The Tokyo-based manufacturer maintained its global sales target of 3.62 million vehicles despite acknowledging a ¥450 billion ($3 billion) tariff impact from Washington’s protectionist measures.
North American demand for Honda’s Accord sedan and CR-V SUV remained unexpectedly robust despite the tariffs, though this resilience failed to offset declines in Japan, Asia, and Europe.
Global vehicle sales fell to 839,000 units from 869,000 year-on-year, compounded by substantial one-time expenses related to electric vehicle operations, including US EV loss provisions and inventory write-downs for discontinued models.
The company highlighted hemispheric resilience through strong motorcycle performance in Brazil and Vietnam, providing critical revenue diversification.
Chief Financial Officer Eiji Fujimura acknowledged the partial relief from a recent US-Japan agreement reducing auto tariffs to 15%, calling the compromise “a positive” for the company’s business, customers, suppliers and shareholders, while emphasising Honda’s enduring commitment to “promote free trade and fair competition around the world.”
“Now we must face up to this new normal,” Fujimura told reporters, underscoring Honda’s strategic pivot to navigate protected markets.
Honda’s predicament exemplifies broader challenges for Japanese automakers. Toyota and Nissan similarly reported profit contractions of 31% and 41% respectively this quarter, collectively facing ¥1.7 trillion in tariff-related losses.
